Washington Collection Laws

Washington Collection Laws
IN THIS ARTICLE:
  • As a practical matter, mortgage deficiency balances may not be collected in Washington.
  • The statute of limitations for most consumer debts is 6 years.
  • Reinstatement of debt must be in writing.

Learn Washington's Rules For Garnishment, Liens, and Foreclosure

If you owe debt and reside in Washington, it’s important to understand your rights and liabilities. It is even more important if a creditor threatens to file a lawsuit against you.

A lender, collection agent or law firm that owns a collection account is a creditor. Washington law gives creditors several means of collecting delinquent debt from you.

Before a creditor may use these legal tools in Washington, the creditor must go to court to receive a judgment against you. See the Bills.com article Served Summons and Complaint to learn more about this process, and how to fight a lawsuit.

A court will hold a hearing after a creditor files a lawsuit. A hearing may result in a judgment awarded to the creditor. A judgment is a court’s declaration the creditor has the legal right to demand:

The laws calls these remedies. A creditor granted a judgment is called a judgment-creditor. Which tool a judgment-creditor may use depends on the circumstances and Washington law. We discuss each of these remedies below. In Washington, the following laws are found under Title 4 of the Revised Code of Washington (RCW) unless specified.

Washington Wage Garnishment Rules

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

How Big a Bite Can a Garnishment Take?

In most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more. Continue reading to understand Washington's restrictions.

Washington exempts 75% of your wages for most garnishments, and 50% for child support (RCW 6.27.150).

For municipal workers, see the Office of Financial Management State Administrative & Accounting Manual, Chapter 25.60 Garnishments and Wage Assignments, for a description of the wage garnishment and levy process. The descriptions apply, in general, to non-municipal Washington residents too. See RCW Chapter 6.27 for specifics about Washington law.

Struggling with Debt?

Use the Bills.com Debt Navigator to learn your options for resolving debt, and the costs and time to debt freedom  breaks down for each option. It’s free!

Washington Bank Account Levy

A levy means the creditor has the right to take whatever money is in a debtor’s account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by Washington law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state’s laws to find if a bank account can be levied.

Under Washington law, consumers must receive a notice of a pending garnishment. The consumer can claim an exemption of up to $500 in bank accounts for judgment garnishments. See RCW 6.15.010 for a list of other exemptions.

Washington Lien

A lien is an encumbrance — a claim — on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

In Washington, a judgment lien can be attached to real estate. The term of a lien is 10 years RCW 4.56.190. See RCW 6.15.010 for a list of exemptions. See RCW 61.12 for the rules regarding liens on person property.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Washington Statute of Limitations

Each state has its own statute of limitations on civil matters. Here are some of Washington’s statutes of limitations for consumer-related issues:

Account/TypeYearsStatute
6*RCW 4.18.040
Spoken contract3RCW 4.16.080
Written contract6RCW 4.16.040
Judgment Lien10RCW4.56.190
Judgment10RCW 4.16.020
Promissory Note6RCW 4.16.040
* Washington appeals courts apply RCW 4.18.040, the rule for written contracts, when deciding cases involving credit card debt.

Washington statutes of limitations. Source: Bills.com

In Washington, the statute of limitations clock starts at the date of last payment, which is not common among the states (RCW 4.16.040). Acknowledgment of a debt or a reinstatement promise, which resets the statute of limitations clock, must be in writing (RCW 4.16.280).

Collection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

Washington Foreclosure

Washington mortgage and foreclosure laws can be found in RCW 61.12 and RCW 61.24. A lender may foreclose judicially or non-judicially in Washington. The common method is non-judicial, and takes a minimum of 190 days after the first default. A notice of foreclosure must be given to the homeowner 30 days before the sale occurs. Judicial foreclosure is also available in Washington, but is used primarily for agricultural land.

As a practical matter, lenders may not pursue homeowners for deficiency balances following non-judicial foreclosure in Washington.

Community Property & Washington Law

Washington is one of the 10 community property states. If you live in Washington, you may have liability for your spouse’s debt. Washington’s community property law is tricky, so do not assume you must pay your spouse’s debt automatically. Read the Bills.com article Washington Community Property Law to learn if you have lability for your spouse’s debt.

Washington Collection Agencies Law

Collection agents, whether they have offices in Washington, must be licensed in Washington. Washington’s debt collection agency law mirrors the FDCPA in most respects, with several exceptions. Under Washington law, which applies to collection agents and not original creditors (for the most part) requires:

  1. A debt collector may communicate with you or your lawyer, and not third parties about your debt
  2. The debt collector to include the following facts the first time it communicates with you in writing:
    • The debt collector’s business address and licensee name
    • The name of the original creditor (if the debt collector knows who it is) as well as your original account number (which can be redacted)
    • When you last made a payment to the original creditor, and
    • A statement including the original amount of the debt and a schedule of additional charges (such as late fees, interest, and attorney fees) that were added.
  3. A debt collector may not call or send text messages more than twice a day if it knows it is contacting you on a cell phone.
  4. A debt collector may not intentionally block its own telephone number when it calls.

Violation of Washington collection agency law is not a criminal matter. If you have been victimized by a collection agent, file a complaint with the Washington Attorney General and the FTC. Consult with a lawyer to discuss filing a civil lawsuit against the collection agent. Some lawyers take these cases on a contingency basis, which means no out-of-pocket costs to you. These laws are found in RCW 19.16.

Recommendation

Consult with a Washington lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.

If you cannot afford a lawyer, contact the Washington Advocate Resource Center or another Washington pro bono program to find no- or low-cost legal services.

41 Comments

KKarla, May, 2021

I loaned a friend $3,500 via western union several years ago. What is the statute of limitations?

JJoshua Abreu-Rosa, Aug, 2021

Hello Karla,
Thank you for reaching out. Are you being charged by Western Union or is your friend? Are you thinking about trying to collect money from your friend?

Regards, Josh

KKristi, Feb, 2021

My wages are being garnished for an old medical bill. How long can they garnish my wages for? The bill will be six years old this June. Please help

JJoshua Abreu-Rosa, Aug, 2021

Hello Kristi,

Thank you for reaching out to us. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can provide legal advice. 

According to the Washington collection laws, the article states that wages are garnished to resolve the debt that was granted in the Washington County court. 

If you feel your rights are being violated I recommend speaking to an attorney so they can consult with your further. 

Regards, Josh 

KKen, Dec, 2020

I received a call from a debt collector representing an old debt from Best Buy with a last payment made in 2012. The caller said I would be served tommorow with a summons for court. Does this fall under the 6 year statute od debt collections. Am I liable ? It is Jan. 30 2020 the debt is more than 8 years. I moved since 2012 in Washington State but did not forward my address to them. Does that matter ?

JJoshua Abreu-Rosa, Aug, 2021

Hello Ken. 

Thank you for reaching out. Please, do not take my answer to be legal advice as I am not an attorney. Only attorneys can offer legal advice.

Generally, a collector is subjected to the Statute of Limitations. Depending on your residence, up to six years.


However, if you received the summons and complaint, notify the court that the collector is past the Statute of Limitations. This should prevent the collector from further litigation.
 
In some states, the Original Collector is not bound by the Statute of Limitations. They can pursue litigation at any time. 

I would recommend speaking with an attorney or if no litigation has taken place you may want to speak to our partner, Freedom Debt Relief. Often times while your worry of litigation is a minimum the debt is still present and it could impact your future expendable income. I would encourage you to seek out your options and learn from the consultant who can be reached at 800-852-1431. If anything is just giving you options about your financial goals. 

Regards, Josh 

DDevon, Nov, 2020

Do I have to give a debt collector a copy of my pay stubs?

DDaniel Cohen, Nov, 2020

Devon, I a not a lawyer and can't give legal advice. I will give you some information but it is not to be taken as legal advice.

Yyou are not required to furnish a debt collector your pay stubs. It is your choice. It could be to your advantage to do so, but it depends. For instance, if you were trying to work out a payment plan and claimed you could only afford $100 a month because you earned $2,000 a month before taxes and all your money goes to rent, food, gas, insurance, then the collector may want to verify that earning amount before agreeing. 

KKatie, Oct, 2020

I have outstanding medical bills that total $951 at the hospital. The collection agency says I owe $2700 to them for the same bills. Is it legal to charge that much in mostly fees?

DDaniel Cohen, Oct, 2020

Katie, whether what the collection agent did is proper or improper depends on what the paperwork with the medical provider said.

I am not a lawyer and can't give legal advice, but I can quite what the Washington State Attorney General's website says about additional charges added by a debt collector. "To determine if the collection agency can add additional charges onto your debt, consult your original contract. If you agreed to pay 'collection costs,' the agency can add reasonable charges such as attorney fees, court costs, or credit reports."