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Understanding Debt Collection in Oregon

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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:

Figure out what's going on
Get more information about the debt
Negotiate a payment plan or settlement
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.
  • Learn how in this article.
Ask them to stop contacting you
Know your rights if you're being harassed

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

Know you may be sued in court
If they win in court, they can garnish your pay
There are protections for your money and possessions
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

Frequently Asked Questions

When a debt goes unpaid, the company you originally owed money to (called the original creditor) might hire someone to collect it. They may also sell your debt to a different business, known as a debt buyer. The debt buyer will then try to collect the money themselves. 

If you don't recognize the name of the company that's contacting you about a debt, it might be:

  • A debt buyer who now owns the debt, or
  • A collection agency or law firm working for the company that does.

It's also possible that it's a scam. This is why it's important to make sure the debt is real, and the company actually has the right to collect before agreeing to pay.

What to do when you're contacted by a debt collector.

Don't agree that the debt is yours right away. 

  • Always ask for proof before paying.
  • Debt collectors must give you certain information about the debt, including who you owe and how much.

Our guide can walk you through the steps.

Debt collectors may sometimes add extra charges, like interest, to your debt. This means you could end up owing more money than the original amount. However, there are limits to when and how much they can add. 

A debt collector can only add interest if:

  1. The original agreement or contract allows it.
  2. A law specifically allows them to add more interest. 

In Oregon, if your agreement doesn't set an interest rate, they can usually charge up to 9% per year in interest.

Learn more in our article "How Does Interest Work on a Debt in Collections?"

In Oregon, most debt collectors have six years to sue you after you miss a payment. 

If your debt is older than this, they may not be able to file a lawsuit against you, and if they do, you may be able to get it thrown out. However, the debt may continue to impact your credit.

Learn more in our article, "Do I Have to Pay a Debt That's Really Old?"

No. You cannot be arrested or put in jail just for not paying a consumer debt. 

Even if a debt collectors sues you over the debt or has a court decision saying you legally owe the money, it is up to them to collect what you owe. 

Not paying can have serious impacts on your credit and your finances, but it isn't a crime.   

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