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Can a debt collection company garnish my bank account?

While struggling to pay bills in Oregon can be stressful, you may be wondering what could happen to you if you are unable to pay a debt at all. While creditors do have some legal recourse for collecting the money you owe them, there are also federal and state laws that protect your rights.

According to the Oregon State Bar, no one can take your money without going to court. If you have not received a summons and a complaint, then this has not happened yet. If you are served with these documents, then you have the opportunity to dispute the debt or the amount you owe. Unfortunately, if the creditor is awarded a judgment, you may owe legal fees, court costs and interest in addition to the original debt.

A creditor may take money from your checking and savings accounts after receiving the judgment. However, the law protects certain types of income from collection. These include the following:

  •          Temporary Assistance for Needy Families, or TANF
  •          Retirement income
  •          Social Security benefits
  •          Unemployment benefits

There are other government benefits that also may not be garnished, but under some circumstances, a creditor could take a portion of your wages, up to 25 percent of your paycheck minus the mandatory federal and state deductions such as income tax and Social Security. However, if you make below the minimum amount per week, your earnings cannot be touched.

If the debt that you owe is the result of unpaid child support, student loans or taxes, these rules and limits may not apply. This information is general in nature, and therefore, it should not be interpreted as legal advice.

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