The governor of Oregon has signed a bill into law that raises the amount of money that can be protected by consumers from garnishments and keeps them from a “financial death spiral because of debt collection,” according to the sponsor of the bill.
“We’re not trying to keep people from having to pay their debt,” said state Sen. Chris Gorsek, one of the sponsors of the bill. “But we are certainly trying to protect them so that in the process of paying those debts they are not economically devastated.”
Among the protections it puts in place or changes are:
- Raises the amount of wages that are protected from garnishment. This changes yearly, from $254 for a one-week period in 2024 to $487 in 2026
- Protects $2,500 in a consumer’s bank account
- Increases protections to prevent consumers and homeowners in Oregon from losing their homes during debt collection proceedings
- Improves protections for consumers under the state’s Unfair Debt Collection Practices Act
- Extends the amount of time consumers have to file a complaint to three years from the date of injury
- Protects consumers from unfair attorney’s fees resulting from civil lawsuits for unlawful collection practices
Among the changes to the state’s debt collection law is this change to the list of unlawful collection practices:
- Amending this provision — “Knowingly collects any amount, including any interest fee, charge or expense incidental to the principal obligation, unless the amount is expressly authorized by the agreement creating the debt or permitted by law” to this: “Collects or attempts to collect or threatens to collect a debt or any interest fee, charge or expense incidental to the principal obligation, by any means, including through legal action, while knowing or having reason to know that the debt does not exist, is not owed by the debtor or is not allowed by the contract creating the debt or by law. The fact that the debt collector obtains a judgment for less than the amount sought in the complaint or fails to obtain a judgment at all does not by itself establish a violation of this section.”
“This bill ensures that no Oregonian will be forced into a financial death spiral because of debt collection,” said Rep. Nathan Sosa, the author of the bill. “It provides a minimum of stability and security so that people can get back on their feet as quickly as possible.”
