Oregon Collection Laws

Oregon Collection Laws
IN THIS ARTICLE:
  • The statute of limitations for credit card debt in Oregon is 6 years.
  • Contracts have a 6- or 10-year statute of limitations depending on the circumstances.
  • Facing a garnishment? File a Challenge to Garnishment to stop it.

Learn Oregon'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. See the state-published document How To Protect Your Assets From Creditors In Oregon (PDF) for additional reference.

Oregon Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which 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.

Protect Yourself Against Wage Garnishment

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.

Oregon allows wage garnishment. Oregon follows federal rules, and exempts 75% of the judgment-debtor's disposable earnings (ORS 18.385 and ORS 18.627). It is unlawful to terminate an Oregon employee because of a garnishment or a support order (ORS 18.385(9) and ORS 25.424(6)(a)). Employers may charge employees a processing fee of $2 for each week or portion thereof during which garnishment payments were made to the garnishor (ORS 18.736).

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.

Oregon allows bank account levy, which state law refers to as "writ of garnishment" (2015 ORS 18.830¹ ). A consumer can file a Challenge to Garnishment (Form 1140) to stop the account account garnishment (ORS 18.700).

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 Oregon, a judgment lien can be attached to real estate and not personal property. (ORS Chapter 87 and 18.150 to 18.162 and 18.180). A judgment-creditor in an automobile-related case may ask the court to order the Oregon DMV to suspend the judgment-debtor's drivers license.

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

Oregon Statute of Limitations

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

Account/TypeYearsStatute
Credit card6Unifund CCR Partners v. Eric S. Deboer (Oregon Court of Appeals Docket A144530 March 28, 2012) and Unifund CCR Partners v. Rigoberto Porras (Docket A146957 March 28, 2012)
Spoken contract6ORS 12.010
Written contract6*ORS 12.080
Mortgage contract6**
Promissory note6ORS 12.080
Judgment10ORS 12.070 and 18.150 to 18.162, and ORS 18.180
* 10 years for "sealed instrument" (ORS 12.070) ** Presumed.

Oregon statutes of limitations. Source: Bills.com

When the statute of limitations clock starts depends on the circumstances and the particular statute. In Oregon, the clock starts "after the cause of action shall have accrued, except where a different limitation is prescribed by statute" (ORS 12.010). The clock may be paused (called "tolled") under some circumstances, or renewed (ORS 12.160).

Know Your Rights - Collection Agents

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.

Oregon Foreclosure

A lender will foreclose either judicially or non-judicially in Oregon. Non-judicial is preferred or customary. This takes 150 days, typically. Lenders are allowed to collect a deficiency balance. See ORS Chapter 88 to learn more. (Note: In late 2013, Oregon amended its rules regarding foreclosure avoidance measure notices, which are found in ORS Chapter 304.)

Oregon Unlawful Debt Collection Practices Act

Collection agents must register with the state. The Oregon Unlawful Debt Collection Practices Act (OUDCPA) mirrors the FDCPA in most respects, with several exceptions.

  • Original creditors are covered by the OUDCPA, and not just collection agents.
  • Creditors cannot call your employer about the debt or call you at your place of work if you have notified the creditor not to.
  • Creditors may call you at work only after he or she has in good faith, but unsuccessfully, tried calling you at home during the day or between 6 p.m. and 9 p.m.
  • Creditors can write to you at work only if your home address is not available.
  • Creditors may contact you at work only once a week.

Violation of the OUDCPA is not a criminal matter. If you have been victimized by a collection agent or original creditor, file a complaint with the Oregon attorney general and the FTC. Consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. These laws are found in Oregon § 646.639 through 646.643.

Recommendation

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

10 Comments

SSGP, Sep, 2020

Can a spouse be held liable for the other spouses medical or dental bills? A collection company is billing me for a bill that isn't mine, however, it IS my spouses bill.

BBetsalel Cohen, Sep, 2020

I am not a lawyer, therefore I can't give legal advice.

It is possible that you may have financial responsibility due to the doctrine of necessaries. Consult with a lawyer in your state, to find out how your state views the doctrine of necessaries.

DDJ Barber, Aug, 2020

Can a collection agency garnish or go after a spouse of a debtor?

DDaniel Cohen, Aug, 2020

DJ, I am not a lawyer, so please do not consider any of the information I share to be legal advice.

Oregon is not a community property state. As a general rule, your spouse should not be subject to being sued and your spouse's income and solely held assets should not be at risk. If the two of you have joint bank accounts or other joint assets your spouse could suffer harm if collection efforts come after the joint assets.

SSM, Feb, 2020

A collection agency emptied my checking and savings. Left me 150.00 for a judgement that they dont report from 20 years ago and have NEVER contacted me. Medical debt occured in 98, judgement in 2001, served to a Male first name only, (claim) and never contacted me EVER AGAIN! Not by mail or otherwise. Renewed the judgement in 2011, still DID NOT NOTIFY ME!! No sign on any website paid or unpaid and wiped me out today... is that even legal? I have had the same phone number for 15yrs and same address for 6. 2 jobs in 18 years. How is this possible?

DDaniel Cohen, Feb, 2020

Very tough circumstances. Apparently there was a default judgment issued in 2001 against you. A default judgment occurs when the defendant doesn't appear. I understand that you said you weren't served notice. Any challenge you make to that is not going to succeed, I beleive, because it is so far back.

It isn't clear how many debt collectors had the debt and were unable to collect from you. It also isn't clear how long this particular collector had the debt. I am not sure there is any recourse in this situation, but I recommend you seek a free legal consultation right away. 

SSherr, Nov, 2019

I have pay my local collection agency every month for the past year. They just called and said I have to pay more each month. Can they do this?

DDaniel Cohen, Nov, 2019

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.

If the collection agent was accepting a payment that is part of a written agreement and you make that payment faithfully, unless the agreement specified revisiting the payment amount it is my opinion that they could not raise the payment.

If, on the other hand, they were accepting a payment that you said was all you could afford, but it was not enough to satisfy them or they had not committed to formally accepting it, they can raises it. The simple acceptance of the payment you were sending is not considered binding.

This kind of situation is stressful, for sure. I am happy to speak with you and strategize about this further and about findiing a way to work out a solution with your creditor while taking care of your other finanical obligations. There is no cost for speaking with me. If this interests you, please take a quick, free Financial Health Survey, as a basis for our first conversation.

ccolleen blankenship, Oct, 2019

A collection agency from us bank has contacted my adult son here in Oregon regarding an account from 10 years ago. The Branch was is Washington state. The collection agency is wanting to serve papers and are tacking on fees of over $1000.00. Along with the 948.22 in overdrafts to close out the account. Is this legal? How can we be sure that once the amounts are paid that it is done? Just making sure they are on the up and up... my son has a lot on his plate right now.

BBills Staff, Oct, 2019

The statute of limitations can be tricky.  If served papers it is important to respond. Check out this article: https://www.bills.com/debt/debt-advice/summons-and-complaint .

Your son should verify the debt and It is normal to have extra fees added, however, he might want to seek legal advice.