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Debt collector/buyer licensing requirement in Oregon?

Hood River, OR |

I understand that a deb t buyer who has purchase a debt can sue in their name without a license in Oregon because they are collecting on their own behalf.Ive been served buy a debt buyer in their name but they only purchased collection rights according to the last bill of sale. If a Debt collector has been assigned a debt for collection purposes only with ownership staying with assignor I would think they would need an Oregon Debt Collectors license to file action . Am I reading the rules wrong?

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Attorney answers 3


This is the statute that appears to control your issue:

Its pretty clear that the debt buyer is not the actual creditor and is simply in the business of collecting debts for another person or entity.

I am also wondering if this constitutes the unlicensed or unauthorized practice or law. I could be wrong but unless the debt buyer is a lawyer, he or she cannot sue to collect for a third person without employing a lawyer.

In other words if OldCo assigns rights to collect to NewCo and NewCo sues in its own name, but it does not use a lawyer, then NewCo is practicing law without a license.

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The debt collection company should be a registered corporation, LLC or assumed business name. You can look these up on the corporation division's website here:

As to whether these companies are practicing law without a licence, I doubt it. Some of them do hire debt collection specialist lawyers. Other file in Small Claims court which does not allow lawyers, so by definition individuals and companies must sue by themselves.

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Your question is not easy to answer in this forum because there are caveats and exceptions to every rule. For instance, a person who rarely collects debts may not be subject to the same licensing requirements of a firm that engages in collection every day. The identity of the collector and its type of business is important, but details of the debt and how collection has proceeded are also important.

It is highly unlikely that the suit could be considered the unlawful practice of law.

Stepping back from the specifics of your question, unless the debt collector has engaged in spectacularly illegal behavior, the only defense that you will ultimately succeed on are that you don't owe the debt for some reason. Defenses about licensing and collection practices generally only delay the inevitable unless the collector commits many violations. These defenses can also help you negotiate a lower settlement, but debtors don't win altogether on them too often.

If you have already been served with a summons, you should also be aware that very important deadlines are fast approaching. Even if you plan to represent yourself, consulting with an attorney about all the details of the debt and collection process would probably pay off in making sure you have the best chance of success in this matter.

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