When an individual falls behind on their financial obligations, their creditors have numerous different options. Collection activity often begins with written notices and phone calls. However, it may soon escalate to more serious efforts, including lawsuits against someone who has failed to make payments on their debts.
Creditors taking someone to court could try to place a lien against their property or garnish their wages. Wage garnishments involve a creditor intercepting part of someone’s income before it ever reaches their bank account. For someone already struggling with their monthly bills, wage garnishment can be a devastating blow.
What are the rules that govern wage garnishment in Oregon?
There are limits to how much a creditor can claim
To secure a wage garnishment, a creditor needs to bring a lawsuit against the debtor or borrower in arrears. The courts must review the circumstances and validate that the debt itself is legitimate and that the debtor has failed to conform to the terms of the initial agreement.
The courts can then issue a judgment in favor of the creditor. A court order is typically necessary for a garnishment of someone’s wages. Oregon law does limit how much creditors can claim from someone’s paycheck. Typically, the maximum amount that they can intercept is 25% of an individual’s disposable income.
However, those with particularly low income may not be at risk of a garnishment. Someone typically needs to make at least 30 times the current federal minimum wage per week to be at risk of wage garnishment. Once a creditor secures a judgment, the person who owes money may have few options for resolving the issue.
Therefore, those facing a creditor lawsuit and the possibility of wage garnishment may want to consider filing for personal bankruptcy. A bankruptcy halts collection activity (including most wage garnishments) and may lead to the discharge of the remaining balance on someone’s debts, allowing them to avoid future collection activity.
Wage garnishment can worsen budgetary issues affecting someone who has fallen behind on their financial obligations. Understanding the rules that apply to Oregon wage garnishment may motivate people to respond more assertively to a pending creditor lawsuit or active collections actions.