Understanding Debt Collection in Oregon

Dealing with debt collection can be overwhelming. You might receive phone calls, letters, or even emails from companies or law firms you've never heard of asking for money. It can be hard to know what to do, what's fair, and what your next steps should be.

This guide is here to help.

• It explains how the debt collection process works, who's involved, and what options you might have.

• It answers many frequently asked questions about debt collection.  

• This guide also links to more detailed articles on specific debt collection topics.

Whether you're just starting to deal with debt collection or trying to understand your rights, knowing the basics can help you feel more confident and in control.

This guide focuses on consumer debts—debts related to personal, family, or household expenses such as medical bills, credit cards, and utility bills. The rules and protections in this guide may not apply if your debt is related to something else, like a business, child or spousal support, taxes, or a criminal case. For more on what is, and is not, a consumer debt, go here

How debt collection works

Debt collection is the process a business uses to try to collect money it believes you owe. It usually starts after you miss a payment:

1. The business may contact you directly to ask for payment.
2. If you don't pay, they might:
   • Hire a debt collection agency or law firm. 
   • Sell your debt to another company, called a debt buyer. Debt buyers are debt collection companies that purchase unpaid debts and then try to collect the money themselves. 
3. Debt collectors may call, send letters, or report the debt to credit agencies. 
4. If the debt still isn't paid, they may file a lawsuit. If they win (or you don't respond), the judge will make a legal decision called a judgment saying you owe the debt. Go here to read our articles on debt lawsuits and judgments.
5. With a judgment, the debt collector can try to take money directly from your paycheck or bank account to pay the debt. This is called garnishment. Learn more in our guide to garnishment here.

Your options when dealing with debt collection

If you're dealing with a debt collector, you have choices. What you do next depends on your situation. Here are some common options: 

Get more information about the debt

• Make sure the debt is real and that it's really yours. Debt collectors must give you certain information, and you have the right to ask for more.

Negotiate a payment plan or settlement

• If you owe the debt but can't pay all at once, you may be able to work out smaller payments or a reduced amount. Always get any agreement in writing.
• For more, check out this guide to negotiating with debt collectors by Oregon Consumer Justice, a nonprofit dedicated to helping consumers in Oregon.

Challenge the debt

• If the debt isn't yours or the amount seems wrong, you can dispute it. The collector must pause collection until they respond with proof.

Ask them to stop contacting you

• You can request this in writing. They must stop, except to tell you they're ending collection or taking legal action.

Know your rights if you're being harassed

• There are laws that limit when and where debt collectors can call when looking for you.
• Debt collectors can't threaten you, lie, or be abusive. 
• If they break the rules, you have ways to fight back.

If the debt is yours but you can't pay it back:

Know you may be sued in court

• If you can't work out an agreement with debt collectors, their next step may be to take legal action by filing a lawsuit against you for the debt. Learn more about debt lawsuits and how to protect yourself in our guide here.

If they win in court, they can garnish your pay

• If they go to court and win, or you don't respond, they may be able to take a portion of your paycheck or bank balance to pay down what you owe. Learn more about how garnishment works.

There are protections for your money and possessions

• Even if they have the legal right to try to garnish your pay or bank account, the law protects some or even all of your money. Learn more about those protections.

You may even be collection-proof

• In some cases, if you don't have valuable possessions or property and have a low income or only get money from benefit payments like social security or disability, you may be collection-proof. This means that even if they have a judgment, a debt collector can't get anything from you. Learn more about being collection-proof.

You might consider bankruptcy

• If your debts are overwhelming and you can't pay them off, bankruptcy can be a way to get control over your situation and even eliminate some debts. Read about how bankruptcy works, your options, and how it can impact you.

Frequently Asked Questions