Can a Debt Collector Take Your Car, Home, or Belongings?

When a person or business sues you for money and wins in court, they may be allowed to collect your debt by taking some of your belongings, like your car or even your home. This is called property seizure.

Seizing property is not very common. More often, people collect by taking money from your paycheck or bank account. This is called garnishment. For more about protecting your wages or bank account from garnishment, go here.

This article explains how the law protects some property from debt collectors, how debt collectors can take property that isn't protected, and what you can do if they get it wrong.

Important:

• These rules apply to consumer debts: debts related to personal, family, or household expenses. Different rules apply for debt related to child or spousal support, taxes, and criminal cases. Learn more in "What is Consumer Debt."
• In debt collection, property means anything you own, like furniture, a car, or a house. The term real property refers to land or a house. Personal property often means other things you own.

What kinds of property are protected from debt collectors?

Oregon law protects things you need for daily life, work, and housing. These protections, called exemptions, usually have a dollar limit:

• If your property is worth less than the protected amount, it can't be taken at all.
• If it is worth more than the protected amount, it can be taken and sold, but you get to keep the protected amount from the sale.

The following types of property are generally protected: 

• Tools: Up to $5,000 worth of tools that you need for your work.
• Household items: Basic things you need to live, like furniture and appliances, up to a value of $3,000.
• Vehicles: A car, truck, or other vehicle worth up to $10,000. (This protection doesn't apply if a lender is taking back a car because you're behind on the loan you used to buy it, also called repossession.)
• Wildcard: You can protect any other item worth up to $400 that doesn't fit into another protected category.

Oregon's protections cover other kinds of property as well. 

• See below in the Frequently Asked Questions section for more examples. 
• Go here to see the full list of protected money and property.

If I own a home, is it protected?

In some cases, yes. 

• Oregon's protection for homes, called the homestead exemption, may protect a house you own and live in from being sold to repay a consumer debt. 
• Or, it guarantees that if your house is sold, you will get some of the money back.

Whether you can keep your home depends on how much home equity you have. Home equity is the value of your home minus what you still owe on your mortgage or other home loans.

For an individual, the law protects $150,000 in home equity. If you own your home with another person who also owes the debt, you may be able to protect more.

• If your equity is less than the protected amount: You cannot be forced to sell your home.
• If your equity is more than the protected amount: The home can be sold, but you are entitled to keep the protected amount from the sale proceeds.

Homes like mobile homes, manufactured homes, residential trailers, and floating homes may also qualify for protection if they are mainly used as your residence.

Learn more about how these protections work in the FAQs below.

What happens when a debt collector tries to take your property? 

If you have property that is not fully protected under the law, the person or business can ask the sheriff to take it (seize it) and sell it in an auction called a sheriff's sale. You will get back your protected amount of money from the sale and the rest will go to pay your debt and other costs.

You must be told in writing ahead of time.

• You must be given written notice before anything can be taken or sold.
• This notice gives you time to respond, especially if you believe the property is protected or a mistake has been made.
• The sheriff cannot sell your property right away. They must follow legal steps and give you time to challenge the seizure.

You can challenge the sale if it includes property that should be protected.

• Remember: all of Oregon's protections have a dollar limit, and protected property worth more than the limit can still be sold. You will get the protected amount back from the money earned in the sale.
• If an item is worth less than the limit, or if it is fully protected from seizure, it cannot be sold at a sheriff's sale.
• If someone tries to take or sell protected property, you can challenge it in court.
• Speak with a lawyer, if possible. The rules about protected property and how to challenge the sale of protected property can be very complicated.

Where to get help:

• You can use the Legal Help Directory to find free or low-cost legal services in your area.
• You can contact the Oregon State Bar Lawyer Referral Service to get connected with a lawyer for a low-cost consultation.

Frequently Asked Questions: