- 9 min read
- 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.
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).
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.
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|
|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.|
Oklahoma statutes of limitations. Source: Bills.com
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.
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.
Consult with a Oklahoma lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.
Dealing with debt
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q3 2023 was $17.291 trillion. Housing debt totaled $12.489 trillion and non-housing debt was $4.802 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in South Dakota, 15% have any kind of debt in collections and the median debt in collections is $2323. Medical debt is common and 3% have that in collections. The median medical debt in collections is $682.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.