Oregon Debt Relief: Your Guide to State Laws and Managing Debt
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Oregon enjoys a median household income close to the national level of $60,366, but the state’s unemployment rate was the eighth-highest in the country, at 4.4%, as of March 2019. So how does that affect consumer debt in Oregon?
Where you live in the state may determine just how much that number affects you and your ability to keep up with your debt. The lowest unemployment rate in the state can be found in the Portland metro area, where it ranges from 3.6% to 3.9%. Generally speaking, the further east or south you go, the higher the regional joblessness rate climbs.
We’ll answer the range of questions that Oregonians may have about debt and how to manage it by looking at Oregon debt collection rules, ways to tackle your debt and when bankruptcy might make sense, among other options. This story will review the following:
- Debt in Oregon: At a glance
- Debt collection in Oregon
- Oregon debt relief programs
- Payday lending laws in Oregon
- Tips to tackle debt in Oregon
- Filing for bankruptcy in Oregon
- The bottom line
Debt in Oregon: At a glance
|Type||Per capita balance, 2018||Rank out of 50 states*||U.S. per capita balance|
|Credit card debt||$3,070||25||$3,220|
|Student loan debt||$5,760||18||$5,390|
|*No. 1 is highest
**First-lien debt only
Source: Federal Reserve Bank of New York, April 2019
Debt collection in Oregon
All Americans have some protection from less-than-ethical debt collection practices under the federal Fair Debt Collection Practices Act (FDCPA). This law protects your privacy by disallowing the debt collector from disclosing your debt when talking to anyone but you or your lawyer. By the same token, when sending mail, there cannot be any information or visible images that would reveal the intent of the letter is to collect a debt.
The FDCPA also details how debt collectors are allowed to interact with you:
- They must not call at inconvenient hours, which, until you personally define them, are considered to be before 8 a.m. and after 9 p.m. local time. They also are prohibited from contacting you at work, if personal calls are not allowed there, or you request not to be contacted there.
- If you ask them to stop contacting you altogether via a written letter, they must do so, even if you still owe the debt. They are also not allowed to harass you by calling repeatedly in succession, using foul language, making threats, advertising that you owe the debt or misrepresenting themselves or the debt.
- If you’ve hired an attorney to handle the situation for you and the debt collector knows about it, they are no longer to reach out to you directly or the people in your life. Instead, the FDCPA dictates that they must contact your lawyer exclusively regarding the matter.
Oregonians are also protected by the Unlawful Debt Collection Practices Act in Oregon, which requires all debt collectors to be registered with the state. This legislation also places limitations on when and how often debt collectors can contact you at work, and further reinforces that you can disallow them from contacting you at work altogether.
If your loan is secured by property, as it would be with an auto loan, the creditor would be well within its rights to repossess the property if you stopped making payments on your loan, as long as you had a written contract. You should know your rights within this process, too, though. No one is allowed to enter your home without your permission, assault you or to try to take back the property, should you attempt to physically prevent its removal. If your agreement was not put to paper, the creditor will have to take you to court before it can take back the property.
If you think a collector is illegally trying to collect a debt that’s not yours or is harassing you in pursuit of a valid debt, file a complaint with the FTC and Oregon’s State Attorney General’s office.
Responding to collection letters
If you receive a debt collection letter, there are certain steps you should take. Here are some things to keep in mind as you interact with debt collectors:
- When you receive notice of a debt, you have 30 days to request debt validation. The debt collector then has 30 days to provide you with the amount you owe, the original creditor’s name and the original creditor’s address. Because of these legislated deadlines and the fact that your case could potentially end up in court, you should always document any communication with a debt collector.
- Be mindful when responding to collection letters. Responding in the wrong manner could have you staring down a debt that otherwise would have been legally forgotten. If your debt has already met the statute of limitations, you should carefully select your words, including phrases like the fact that you are “disputing the debt” and you want its validity “verified.”Until the debt is validated, do not acknowledge that you owe anything or make any promises to pay. You may also want to sit down with an attorney. That way, if the debt is past the statute of limitations, you won’t restart the clock for the collector to take legal action.
- If you receive a court summons related to your debt, do not ignore it. Doing so could serve as an admission of guilt should you be absent on your court date. Even if it is past its statute of limitations, a judge’s ruling could restart the timeline.
Understanding Oregon’s statute of limitations
If you owe a debt, or a debt collector believes you owe money, there is only a certain amount of time in which the debt collector can sue you to collect old debts. This time period is known as the statute of limitations.
After a debt has passed its statute of limitations, it is considered time-barred. Debt collectors have no legal grounds to pursue time-barred debts, but that doesn’t mean they won’t try. However, if you in any way admit to owing the time-barred debt or make even a marginal payment, you could restart the statute of limitations. For that reason, you should be very careful when dealing with old debts.
The statute of limitations for debt collection varies from state to state. It also will vary depending on the type of debt you owe. In Oregon, debt collectors have the following amounts of time to pursue you for different types of debt.
|Oregon Statute of Limitations on Debt|
|Mortgage debt||6 years|
|Medical debt||6 years|
|Credit card||6 years|
|Auto loan debt||4 years|
|State tax debt||None|
In general, if you have a contractual debt in Oregon that you have not repaid, the creditor has six years to pursue you with legal action before the Oregon statute of limitations expires. This applies to medical, credit card and mortgage debt. However, if you owe money on an auto loan, the creditor only has four years to sue. There is no statute of limitations on state tax debt.
Remember that the statute of limitations doesn’t necessarily start when you were initially billed. Rather, it begins with the last payment you made on your debt. This is why making a payment will restart the statute of limitations.
Oregon debt relief programs
If you find yourself with an insurmountable amount of debt, you may benefit from credit counseling. A credit counselor can help you assess your debt situation and look for possible solutions such as debt management and consolidation. The first credit counseling session is usually free.
In order to make sure you’re speaking with a credit counselor with your best interests at heart, be sure your counselor, or his or her agency, is listed with the National Foundation for Credit Counseling (NFCC). Two such organizations serving Oregonians are Advantage Credit Counseling Service and Money Management International, which offer credit education and counseling services. Additionally, Oregon.gov has information on financial services for consumers, including how you can manage your debt, and can verify whether a debt management service company is registered with the state.
When you work with a credit counselor, you pay them a set amount monthly, which they then split and apply to your debt payments. The advantage of working with a credit counselor is that they negotiate things like late fees and annual percentage rates (APR) and may even be able to extend the term of your loan. All of these actions can serve to lower your monthly payments.
Be mindful that debt settlement companies and credit counselors are not the same thing. While reputable credit counseling agencies operate as nonprofits, debt settlement companies tend to be for-profit. When you settle a debt, the company is negotiating a lower lump-sum payment on your behalf and they may be able to get the creditor to reduce the debt.Though you should always be mindful of potential scams, like unrealistic promises and upfront fees, there are some major debt relief companies that may be able to help.
Payday lending laws in Oregon
When it comes to payday loans, every state has its own regulations in place to protect consumers. Oregon’s rules limit the loan amount, specify minimum and maximum loan terms, cap finance charges and set interest rate ceilings.
- Maximum loan amount: $50,000
- Maximum loan term: 60 days
- Finance charges: $30 or $10 per $100 — whichever is less.
The most you’ll be able to borrow via a payday loan in Oregon is $50,000, with term lengths stretching between 31 and 60 days. You will pay high interest rates, though the interest rate cap of 36% is comparatively protective of consumers. However, an interest rate alone isn’t an effective way to compare payday lending products. A better measurement is the annual percentage rate (APR), which annualizes the interest rate and the origination fee or finance charges over the course of a year. Taking this fact into account, the maximum APR for these loans in Oregon can hit almost 154%.
Ideally, you’ll never take out a payday loan. It’s not a financial move we’d recommend, due to the high interest rates and the potential to get sucked into a cycle of debt. While we recognize that 50% of Americans cannot cover an emergency of $1,000, it’s important to understand the nitty-gritty of payday lending before you sign on the dotted line. Plus, there are alternatives to this risky borrowing method.
Tips to tackle debt in Oregon
A payday loan isn’t your best strategy to tackle debt, but there are other ways to get the job done. You may want to look into debt consolidation, a credit card balance transfer, refinancing or creating a viable payoff plan.
Consolidate your debt
If you’re facing sky-high interest rates on your debt and are having trouble keeping track of multiple loan payments, you may want to consider a debt consolidation loan. Your unsecured debts are rolled into one fixed, monthly loan, making them easier to keep track of both in terms of payment amounts and due dates.
Debt consolidation loans can be your saving grace, if you qualify. Depending on your income, credit history and the amount of money you need to borrow, interest rates can be lower than those you’ll find on most credit cards, unless your credit score is poor. Predictability goes up, while expenses usually go down.
However, it can be tricky to get the timing just right. That same debt you’re having trouble paying off is also negatively affecting your credit score, making it more difficult to secure the loan you’re seeking. If you are able to qualify for a personal loan for debt consolidation, just make sure the interest rate is lower than the ones on your existing loans and to apply before your credit is already shot.
You may be able to refinance your mortgage or auto loan. You would seek to refinance at a lower interest rate than the one you’re currently paying, but if your credit has gone downhill in recent months, you may not qualify for those lower rates. Even if you do qualify for lower rates, you may end up paying more in interest over the course of your loan if the refinance bumps back your final scheduled payment.
However, if you can secure a lower interest rate you may be able to save money over the course of your loan. Another big reason to refinance is that while a longer term may mean you pay more interest in the long run, it can also often mean more affordable monthly payments. This is a viable route to pursue if you’re having a hard time managing your current loan; just make sure to run the numbers first.
If you have federal student loans, refinancing is likely not a good idea. With federal student loans, you potentially have access to a number of advantaged repayment, forgiveness and cancellation options. When you refinance your student loan in the privatized market, you give up access to those programs.
If you have private student loans, refinancing is more likely to help you much in the same way an auto or mortgage refinance could — by potentially lowering your interest rate or monthly payments, depending on your credit history and loan terms. This can make your monthly payments more affordable.
Use a balance transfer card
Zero-percent interest balance transfer cards can be another great option if your credit is still good. It all starts when a credit card company offers you a 0% promotional interest rate, typically for the first 12 to 21 months. For a balance transfer fee of roughly 3% of your balance, depending on the card, you can transfer your debt and eliminate interest charges for the immediate future.
If you’re carrying too much debt, you may not qualify for a new credit card, whether or not it’s offering 0% interest on balance transfers. However, much like debt consolidation or personal loans, if you can get the timing right to pay it off before the promotional period ends, this solution might save you money. If not, you could end up in even deeper debt than before.
Try snowballs and avalanches
If your Oregon debt is spiraling out of control, you may have started ignoring it. Pretending it isn’t happening is easier for a lot of people than acknowledging the burden and all the stress that comes along with indebtedness.
If this is the case, sitting down and getting organized may be the key to getting your debt under control again. List out all of your debt balances, along with corresponding interest rates. The first method — known as the debt avalanche payoff method — requires you to pay the minimum on all of your debt but throw the largest chunk of your payoff money at the debt with the highest interest rate. Once that debt is eliminated, you’ll tackle the debt with the next-highest interest rate, and so on.
The debt avalanche method is the best way to pay off your debt mathematically, but humans don’t always behave in a mathematical way. Studies have shown that the debt snowball method, wherein the smallest debts rather than the largest interest rates are tackled first, is far more effective. When we see small wins earlier on, we’re more motivated to keep going. Even though you’ll pay more using the debt snowball method, most people are more likely to stick with it than the avalanche method.
Filing for bankruptcy in Oregon
You’ve tried everything else and you still can’t get a handle on your debt. In that case, you may consider looking at something as drastic as bankruptcy. Bankruptcy can help you eliminate some of your debts, but it will stay on your credit report for up to 10 years. While your credit score is likely to rise back to the “good” range within a couple years, the history of a bankruptcy on your credit report is likely to net you unfavorable terms on loans and lines of credit. However, if you build your score back up enough, the effects of bankruptcy are likely to decrease.
There are two basic types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy allows you to essentially erase many of your debts, but you’ll have to liquidate all or most of any assets you have as a part of the process. Chapter 13 bankruptcy is more like a restructuring of your debt. You get to keep property like your house or your car, but you’ll have to continue making payments, usually over three to five years.
If you want to learn more about bankruptcy in Oregon, check out the FAQs section on the District of Oregon’s U.S. Bankruptcy Court page.
The bottom line
No matter your debt load, as an Oregonian, you have rights and options. Familiarize yourself with them before you start paying off a debt, engage with an Oregon debt collector or do something as drastic as filing for bankruptcy.
The information in this article is accurate as of the date of publishing.