What Does It Mean to Be Collection-Proof or Judgment-Proof?

Being collection-proof means that even if you owe money, debt collectors can't take your income or possessions because they are protected by law. 

This article explains what it means to be collection-proof (also called judgment-proof) and helps you understand whether these protections might apply to you.

Your protections against debt collection depend on the type of debt you owe. 

• This article explains your rights when the debt is a consumer debt—that is, debt related to personal, household, or family expenses. Different rules and protections may apply if your debt involves child or spousal support, federal or state taxes, criminal fines or restitution, or other types of debt.
• Learn more about what counts as a consumer debt here.

Who is collection-proof?

If you are sued over a debt and the judge rules that you legally owe money, the winning side can try to collect the debt from your paycheck, bank account, or valuable possessions. This is called garnishment. 

A person is collection proof if all their money and possessions are legally protected from garnishment.

In Oregon, the law protects:

• A minimum amount of your paycheck and bank account balance.
• Income from certain protected categories, like Social Security income, disability, and public benefits.
• Certain personal possessions, a qualifying vehicle, and some of the value of a home, if you own one.

Just how much money is protected?

Paychecks and wages: Oregon law currently protects approximately $1,300 per month from debt collection.

• The exact amount protected depends on how often you are paid (for example, weekly, twice per month, or monthly).
• The amount increases annually based on Oregon's minimum wage. 

Bank accounts: If you have money in a bank account, Oregon law currently protects a minimum balance of $2,500. 

• That amount will also increase annually to keep up with inflation.

For more detailed information on these limits and your rights when debt collectors go after your pay, read our articles on garnishment here. 

What kinds of income are protected entirely?

Debt collectors trying to collect a consumer debt cannot take any money that comes from a protected source. This is called exempt income. Some common types of protected income include: 

• Social Security
• Disability
• Public assistance like TANF and SNAP
• Unemployment benefits
• Veterans benefits

// For a complete list of protected income, go here.

What personal possessions and property are protected?

• Basic household goods
• Tools used for work
• A vehicle worth $10,000 or less
• If you own a home, a portion of your equity (the value of the home minus what you still owe on the mortgage)

// For a complete list of protected possessions, go here.

What happens if you are collection-proof?

If you are collection-proof, someone trying to collect a debt can still:

• Sue you in court.
• Get a judgment in court that says you owe the money.
• Request a portion of your wages or bank account. However, your employer or bank is required by law to verify whether your money is protected before allowing the garnishment.
• Take back specific items if you signed a written agreement that allows repossession (such as with a car loan).

Being collection-proof might not last.

A court judgment in a consumer debt collection lasts for ten years and can be renewed for another ten years. Even if you are collection-proof today, your situation might change in the future.

• If your financial situation improves—for example, if you get a higher-paying job or get a more expensive—the creditor may be able to garnish some of your pay or property.