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Oregon lawmakers pass bill that 'changes landscape' on debt collection

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Eric Tegethoff

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(Oregon News Service) Consumer advocates in Oregon are praising recently passed legislation they say changes the landscape on debt collection. 

Senate Bill 1595, known as the Family Financial Protection Act, gained approval from lawmakers during this year's short session. 

It provides a number of protections for consumers against debt collection practices, including ensuring that collectors don't come after people for debt that isn't theirs or is for the wrong amount. 

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Executive Director of Oregon Consumer Justice Jagjit Nagra said it also changes the period of time consumers have to file a complaint.

"Originally, it was a one-year statute of limitations - and in many debt collection scenarios that's pretty problematic," said Nagra. "So, if you think about medical billing, it can take a long time for, often, just those bills to be produced and then that clock has already started ticking. So we extended that from one to three years."

The legislation provides other safeguards as well, such as from overwhelming legal fees and more garnishment protections.

Oregon state Representative Nathan Sosa - D-Hillsboro - said lawmakers heard heartbreaking stories this session about the impact of debt on families.

"Many of the Oregonians who are in debt collection," said Sosa, "are there because of an unexpected medical emergency, or they have suffered from another tragedy - such as the death of a spouse who was the income earner for the family."

Nagra said rural communities in Oregon have the highest share of debt collection in the state. 

He also noted that communities of color share a higher burden, with 28 percent of households in some sort of debt collection, compared with 16 percent of white households.

"It's an issue that folks are grappling with in the here and now," said Nagra. "So, for us, it was really important to have these fixes advanced because from our purview, quite frankly, they are long overdue."

The bill is awaiting the governor's signature.