Oklahoma Collection Laws

Oklahoma Capitol | Oklahoma Collection Laws

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IN THIS ARTICLE:
  • The statute of limitations for credit card debt is either 3 or 5 years, depending on the facts.
  • Facing garnishment? You can file a hardship claim to stop it.
  • Judgments have a short lifetime in Oklahoma: 3 or 5 years.

Learn Oklahoma's Rules For Garnishment, Liens, and Foreclosure

A lender, collection agent or law firm that owns a collection account is a creditor. The law gives creditors several means of collecting delinquent debt. But before a creditor can start, the creditor must go to court to receive a judgment. See the Bills.com article Served Summons and Complaint to learn more about this process.

The court may grant a judgment to the creditor. A judgment is a declaration by a court the creditor has the legal right to demand a wage garnishment, a levy on the debtor’s bank accounts, a lien on the debtor’s property, and in some states, ask a sheriff to seize the debtor’s personal property. The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which of these tools a judgment-creditor will use depends on the circumstances. We discuss each of these remedies below.

Quick Tip
The Webmaster for the Oklahoma state Web server chooses, as of this writing, to publish Oklahoma's statutes in RTF format. You will need a tool such as Microsoft Word, Microsoft Word Viewer, or LibreOffice to read the statutes.

Oklahoma Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

Oklahoma allows two types of garnishment: continuing or wage garnishment, and non-continuing, which is bank account levy. For wage garnishment, Oklahoma follows federal rules, and exempts 75% of the judgment-debtor’s disposable earnings (OK Stat. Title 12-1173.4(I)(1)). Consumers can claim an exemption from a wage garnishment. One exemption may be undue hardship to the consumer’s family and/or dependents if the garnishment takes place (15 U.S.C. sect; 1673; OK Stat. Title 31-1.1. Oklahoma courts consider the following factors in determining an undue hardship:

  • The income and expenses of the consumer’s family and dependents
  • The consumer’s standard of living
  • The consumer’s standard of living in comparison to the minimal subsistence needs of his or her family and dependents
  • The consumer’s standard of living in comparison to the minimal subsistence standards in the community in regard to basic shelter, food, clothing, personal necessities, and transportation

The court is then required to determine whether the consumer and his or her dependents would suffer undue hardship if the garnishment were to remain in place (OK Stat. Title 31-1.1). The court may then either:

  • Order all or a portion of the earnings exempt, or
  • In the case of a continuing wage garnishment, exempt all or a portion of the earnings withheld within the 30 days preceding the filing of the claim for exemption, or modify or stay the garnishment for a period of time not to exceed the 180-day period in which the continuing garnishment shall be in effect (OK Stat. Title 31-1.1 (RTF)).

Wage garnishments remain in effect until either the amount is satisfied or 180 days passes, whichever occurs first (OK Stat. Title 12-1171 and 1173.4).

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law. If you reside in another state, see the Bills.com Wage Garnishment article to learn more.

Levy Bank Accounts

A levy means the creditor has the right to take non-exempt money in a debtor’s account and apply the funds to the balance of the judgment. The procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied.

Oklahoma allows bank account levy, which state law refers to as non-continuing garnishments. The undue hardship exemption for non-continuing garnishment is the same as continuing garnishment, with additional exemptions an Oklahoma court must consider. Additional non-continuing garnishment exemptions include

  • Social Security benefits
  • Supplemental security income
  • Unemployment benefits
  • Workmen’s compensation benefits
  • Welfare benefits
  • Veteran’s benefits
  • Certain classes of pension
  • Retirement fund
  • Disability benefits
  • Civil Service Survivor annuities
  • Prepaid burial benefits
  • Proceeds of group-life insurance policies
  • Alimony, support, separate maintenance, or child support payments necessary for the support of the judgment-debtor’s dependent(s)

See 38 U.S.C. § 5301(a); 42 U.S.C. § 407(a); 42 U.S.C. § 1383(d)(1); 45 U.S.C. § 231m(a); 45 U.S.C. § 352 (e) to learn more.

Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

In Oklahoma, a judgment lien can be attached to real estate only, and not personal property (OK Stat. Title 12-706 and 735). A judgment lien has a lifetime of 5 years in Oklahoma, and is subject to the consumer's homestead exemption.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Oklahoma Statutes of Limitation

Each state or commonwealth has its own statute of limitations on civil matters. Here are some of Oklahoma’s statute of limitations for consumer-related issues:

Account/Type Years Statute and Case Law
Oklahoma statutes of limitations. Source: Bills.com
Credit card 3 or 5* OK Stat. Title 15-140(C)(2) (RTF) and OK Stat. Title 12-95 A(2) and Citibank South Dakota N.A. v. Santoro, 150 P.3d 429, 432 (Ore. 2006) and Discover Bank v. Worsham, 176 P.3d 366, 368–69 (Okla. Civ. App. 2007)
Spoken contract 3 OK Stat. Title 12-95 A(2) (RTF)
Written contract 6 OK Stat. Title 12-95 A(2)
Mortgage contract 5 OK Stat. Title 12-95
Promissory note 5 OK Stat. Title 12-95
Judgment 3 or 5** OK Title 12-95 A(2) and OK Title 12-735
* Where a credit issuer or debt buyer can demonstrate that a consumer was provided clear terms in writing before account use, the creditor can argue the longer, 5-year statute applies.
** OK judgment is 5 years and can be renewed, and a non-OK judgment is 3 years.

When the statute of limitations clock starts depends on the circumstances and the particular statute. In most states, the clock starts after the cause of action accrues. The clock may be paused (called "tolled") under some circumstances, or renewed.

There is uncertainty about the Oklahoma statute of limitations for credit card debt. Some Oklahoma courts apply the 5-year statute of limitations for written contracts to credit card agreements. However, others apply the 3-year statute of limitations for open and unwritten contracts. Some Oklahoma commentators say when Oklahoma statute of limitations law conflicts with another state’s statute of limitations law, Oklahoma courts will use the longer statute of limitations. Others say Oklahoma courts default to 3 years, unless the creditor can prove it gave the consumer notice of the 5-year statute of limitations. To determine which statute of limitations will likely apply in your credit-card case, consult with an Oklahoma attorney to whom you can explain the details of your case. He or she will make an informed guess about your situation.

Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Oklahoma Collections Laws

Oklahoma has not written a state law that subjects original creditors to the rules collection agents must follow under the FDCPA. Collection agents do not need an Oklahoma license.

Oklahoma sets a minimum standard for documentation of delinquent accounts. State-wide, Oklahoma courts require original creditors and collection agents collecting consumer credit card debt to provide the following documentation:

  • A cardmember agreement establishing the terms of the account, or
  • Establish the parties had a previous business relationship and the consumer — either expressly or impliedly — agreed to repay the amount claimed as due (Discover Bank v. Worsham, 176 P.3d 366, 369 (Okla. Ct. App. 2007))

In other words, the Worsham case establishes the original creditor must maintain complete and accurate records during the life of a credit account if it expects to pursue collections through Oklahoma courts.

If an original creditor or collection agent wishes to obtain a default judgment against a consumer, Oklahoma’s Seventh Judicial Circuit requires a creditor to provide the following documentation to a court before it may enter default judgment in the creditor’s favor:

  • Proof of service
  • Servicemember’s affidavit in accordance with the Servicemember’s Civil Relief Act of 2003 and Department of Defense Status Report (many judges require both an affidavit and a screen shot demonstrating that the attorney actually visited the Department of Defense Web site)
  • Proof of breach of last payment
  • Copy of the contract, mortgage, note or account
  • Amount of debt, principle and interest
  • Assignments, if applicable; and
  • Any other item requested by the local judge

Oklahoma state district court judges hold original creditors and collection agents to a very high bar when it comes to establishing their entitlement to damages, costs, or fees on a consumer credit account.

Oklahoma Foreclosure

A lender will foreclose judicially in Oklahoma. This takes about four to six months, typically. Once the homeowner receives a notice of foreclosure, he or she has has 20 to 30 days to respond. Lenders are allowed to collect a deficiency balance, but the amount is limited by the market value of the property. The lender must ask the court for deficiency judgment within 90 days after sale. See OK Stat. Title 12-686, and 12-764 to 765, and 773. And, also see OK Stat. Title 46-41 through 49 (RTF) to learn more.

Recommendation

Consult with a Oklahoma lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.

15 Comments
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  • D
    David,
    Sep, 2020

    If they put a levy on my account can they take all of the money or just 25% of it?

    • 35x35
      Daniel,
      Sep, 2020

      David, I am not an attorney, so the information I share is not to be taken as legal advice.

      The 25% limit is on wage garnishments in the Sooner State. For bank levies, all of the money in the account can be taken, if it doesn't come from one of the protected sources of income that is listed on this page about collection laws in Oklahoma.

  • S
    Sheila,
    Jul, 2020

    If I was served papers and a judgment is issued now many bank account can they put a judgement on? I have a bank account that is my own but a few years ago my father was planning on moving closer to the family and opened a bank account to pay for construction purposes for his home . He put me on the account Incase I needed to write any checks . We have since then had a falling out so I have no idea what he does with that account but he’s the only one who deposits / withdrawals from it . Can they garnish from both accounts ?

    • 35x35
      Daniel,
      Jul, 2020

      Sheila, I am not an attorney, so the information I share is not to be considered legal advice.

      Any account with your name on it is subject to garnishment. You should remove your name from your dad's account or it is at risk.

  • K
    Kat,
    Jun, 2020

    I had bought a vehicle with what was my husband at the time 20 years ago. After the divorce a year later they repossessed the vehicle. I was the cosigner and he was on the top of the loan. My ex-husband passed away 15 years ago. Without any notice they just now started garnishing 25% of my paycheck. How is it possible that a company that has gone bankrupt many years ago is able to garnish my paycheck 20 years later?

    • 35x35
      Daniel,
      Jul, 2020

      Kat, I am sorry to read about your situation. Garnishments are awful, doubly so when it hits you by surprise.

      You asked how could this happen. One way is that at some point you were sued as a party to the debt. All parties on the loan are financially responsible, neither more than the other. The suit resulted in a judgment. Judgments in The Sooner State last 5 years, but can be renewed if they don't expire, until the judgment is paid. Why it took them this long to find you, I cant say. When the finance company went banktupt, it is likely that their portfolio of accounts receivable and collection accounts were acquired in a sale to raise funds to satisfy their creditors. Some debt collection agency may have bought the legal right to collect on your debt. If you were working all these years it seems unusual that they hadn't found tiy before. It could be that the size of the debt made it worth the effort of renewing the judgment a number of times. The validity of that strategy is the unfortunate fact that they are garnishing you now.

       

  • L
    Layla,
    Jun, 2020

    I recently took over the Office Manager role at a funeral home, they have not sent out statements for several years and have tons of unpaid accounts between 4 and 7 years old. Can we continue to request payment on these accounts and get a judgement on them if unpaid or do I need to just claim these as bad debit and write them off?

    • 35x35
      Daniel,
      Jun, 2020

      Layla, I am not an attorney. I can share some information but don't consider it legal information, please.

      If, as I assume, to engage the services of the funeral home, people filled out paperwork and signed some contractual agreement. If that is correct, the the OK statute of imitations on debt would apply. For a wrtiten contract, the SOL in the Sooner state is 5 years. 

      One way to go is to not send anything to people whose debts older than 5 years from the date of first delinquency.

      Another option is try and get people to agree a payment plan or offer some discount that shows some flexibility on your end and understanding that heairng from you now is unexpected. I don't know what OK law says about trying to collect on debt that is past the SOL. You shouldn't try to collect on those debts without first speaking with an attorney, in case it is illegal.

  • T
    Tony Burleigh,
    May, 2020

    Ford motor credit has started garnishment against me for a car I got 20 years ago when I was 17, I was not served with any papers because I haven't lived at that address for at least 22 years. I now live in Texas for the last 4 years. I need help to stop this. What can I do??

    • 35x35
      Daniel,
      Jul, 2020

      Tony, I can't give legal advice, as only an attorney can properly do so. Here are a couple of thoughts, with the understanding that I am not giving you legal advice. 

      You need to get more facts together. You may have some that you did not include in your question. I understand if you don't have a full picture, but it is important to speak with someone who can ask the right questions.

      When you say they started a garnishment against you, what do you mean? Is someone taking money out of the last paycheck you received? Are you paid by a payroll office that is in Texas? Do you have any indication when a judgment was obtained?

      In Texas, the general rule is that wage levies are not allowed for this kind of debt. Bank accounts can be hit, so if there is a judgment against you, keeping any money in a bank account with your name and social security number tied to it places the funds at risk, whether you or another account holder deposited them.

      As I said to open my response, I can't give legal advice. I am willing to speak with you and present some questions I would ask an attorney. Email me at dcohen@bills.com if you want to speak.

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