SALEM, Ore. — Oregonians could soon have new protections against unfair debt collection. The state legislature passed a bill that keeps debt collectors from wiping out someone’s bank account, helps protect wages from being garnished and prevents people from losing their home during debt collections.
“This bill ensures that no Oregonian will be forced into a financial death spiral because of debt collection,” said Rep. Nathan Sosa of Hillsboro. Senate Bill 1595 now goes to Gov. Tina Kotek’s desk.
The Family Financial Protection Bill helps protect Oregon consumers while paying off their debt by:
- Increasing the amount of wages that are protected from garnishment.
- Protecting $2,500 in someone’s bank account so they can pay for their basic needs, like rent, while paying off debt.
- Increasing protections to prevent Oregonians from losing their homes during debt collections.
- Improving protections for consumers under the Unfair Debt Collection Practices Act.
- Extending the amount of time consumers have to file a complaint to 3 years from the date of injury.
- Protecting consumers from unfair attorney fees resulting from civil lawsuits for unlawful collections practices.
In Oregon, 680,000 people have debt that’s been turned over to collections, according to the Urban Institute, a nonprofit research organization. That’s 16% of the state’s population.
Often, debt collectors sue, resulting in seized wages or garnished bank accounts. On average, more than 100 debt collection-related civil lawsuits are filed against consumers every day in Oregon, according to statewide court data.
KGW worked to expose the aggressive tactics used by debt collectors in a series of reports titled “The Cost of Collections.” In one case, a debt collector sued a West Linn woman for a debt she claimed she didn’t owe. A Hillsboro man spent weeks fending off a debt collector. In May 2023, KGW profiled a man who had his bank account unexpectedly and wrongly wiped — leaving him no money for rent or funds to help care for his disabled brother.
“It does make me feel a lot better knowing that enough people heard my story. It was told over and over again, and was used to push help push legislation,” said John Salazar of Happy Valley.
The Family Financial Protection Bill prevents debt collectors from seizing someone’s entire bank account.
“It feels really good to know that people going forward who are in my situation won’t have to worry about their bank accounts being frozen and losing all their money,” said Salazar.