A bill is progressing through the Oregon legislature that would protect and exempt more of an individual’s wages and assets from seizure in the event of judgments and garnishments, while also amending the state’s debt collection law.
A copy of the bill, House Bill 2008, can be accessed by clicking here.
The Oregon legislature’s House Business Committee approved the bill in March, and it is now being considered by the House Rules Committee, which held a hearing on the bill last week. The bill has the backing of five key Democratic lawmakers, including the president of the state Senate and the Speaker of the House, according to a published report.
The statute would amend the state’s existing debt collection law to prohibit attempting to collect (the existing statute just prohibits the collection) of any amount, including fee, charge or expense incidental to the principal obligation, whether the principal obligation exists or does not exist, by any means, including through threatening to bring any legal action. If found to have violated this statute, the collector could be found to have engaged in an unlawful collection practice.
The bill also increases the penalty for engaging in an unlawful collection practice to allow any injured party to recover actual damages or $1,000, whichever is greater. The current limit is $200. Class actions would also be allowed under this statute, when appropriate.
The bill also repeals a provision that deemed collectors that are subject to and in compliance with the Fair Debt Collection Practices Act to be in in compliance with the requirements of the state’s debt collection law.
Among the changes to existing garnishment laws would be:
- Raising the amount of take-home pay workers can keep after wage garnishments to at least $590 from $254, the Portland-area minimum wage for a 40-hour work week, or 75% of the check, whichever is more.
- Providing more protection for people’s housing, including for seniors. Currently, only $40,000 of a home’s value is protected from seizure to pay off debts. That would increase to 33% of the real market value, with all of the home’s real market value protected for seniors 65 years and older.
- Protecting bank accounts with a balance of up to $2,500 from garnishment. The bill would also protect vehicles worth up to $10,000 from court seizure to pay off debts, an increase from $3,000.
“For banks, House Bill 2008 will impact the cost of credit and its availability in Oregon,” the Oregon Bankers Association said in submitted testimony. “As the potential risk of not being able to collect on an unpaid loan increases, so will the cost of the loan. Banks will have to factor collection risk into the cost of a loan, making lending more expensive.”
