Washington Collection Laws

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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 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 (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, , for a description of the wage garnishment and levy process. The descriptions apply, in general, to non-municipal Washington residents too. See for specifics about Washington law.

Struggling with Debt?
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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/Type Years Statute
Washington statutes of limitations. Source: Bills.com
  6* RCW 4.18.040
Spoken contract 3 RCW 4.16.080
Written contract 6 RCW 4.16.040
Judgment Lien 10 RCW4.56.190
Judgment 10 RCW 4.16.020
Promissory Note 6 RCW 4.16.040
* Washington appeals courts apply RCW 4.18.040, the rule for written contracts, when deciding cases involving credit card debt.

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.

30 Comments
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  • H
    Holly Puga,
    Jun, 2020

    I'm a widow on a very small widow's benefit and trying to find help with credit card debt that I'm unable to pay. Trying to keep my home. Any advice would be greatly appreciated. Thank you.

    • 35x35
      Daniel,
      Jul, 2020

      Hi, Holly. I am not a lawyer. I will share some information with the understanding that it is not to be taken as legal advice.

      Delinquent credit card debt is not going to lead to a foreclosure, unless you were sued and they could garnish your income to a level that made you unable to pay your house payment. That would take time to occur. My advice is to check and see if your income is protected from a credit card company even in the event you are sued and they get a judgment. If it is, defaulting on the cards could be a strategy that reduces your monthly obligations at the cost of damaged credit. It can be very reasonable to to choose that route, even if you have never defaulted on a debt in your life and the thought of doing so is a bitter pill to swallow.

       

  • S
    Susan,
    May, 2020

    How can you find out if there is a judgment against you in Washington state?

    • 35x35
      Daniel,
      Jul, 2020

      Susan, the first resource I would try is to do a search in the database of the Washington Courts. Let me know if that workse for you or doesn't. Pay attention to the warnings and instructions at the top of the page.

  • A
    Ashley,
    Feb, 2020

    Is a creditor allowed to demand that we make our payments via automatic withdrawal? I am not comfortable giving them my account information, and the last time we did this (using a different bank account that is now closed) they kept saying that my card would not work with their system and they charged me for it. I offered to send a check or money order via certified mail.

    • 35x35
      Daniel,
      Feb, 2020

      Ashley, you need to get a lawyer in Washington to answer that definitively. Th

      Here are a couple of ideas:

      1. Ask the creditor to state that there is no other option available, preferably in writing, and ask for all the rules covering the payments including the notice you are legally allowed to give if you wish to revoke payment authorization.
      2. Consider opening a separate account just to pay this bill. 
  • M
    Melissa,
    Jan, 2020

    I live in WA state. My family savings account was garnished for almost $1,300 for a SEARS MasterCard credit card not in our name. My husbands deceased wife died in 2008. We moved here from Virginia in 2018. Virginia is not a common law state. The levy is from 2012 in Virginia. We’ve never been served or given any information...just poof...your account is garnished. What can I do?

    • 35x35
      Daniel,
      Feb, 2020

      Melissa, I am not a lawyer so you must not consider my answer to be legal advice.

      I am sorry that you received this kind of surprise. It appears that the judgment that took place in 2012 included your husband as a responsible party, though his name was not on the Sears account in his deceased ex-wife's name. It also appears that the judgment-creditor domesticated the judgment in WA state. 

      Speaking with a lawyer and presenting all the facts is your best option for determining if this can be undone with funds refunded if proof is supplied. If the amount taken did not pay the debt in full, do n ot keep money in the bank account until you resolve the problem, as the account can be hit more than once.

  • M
    Matt Hickey,
    Jan, 2020

    Hi. I deposit my firefighter pension into a bank that has a credit card that is delinquent. The bank has withdrawn $904.00 from my checking to the credit card. I am disabled along with my wife and we also get SSA. Can they do this? I see that they have to file a lawsuit first.

    • 35x35
      Daniel,
      Jan, 2020

      The contract you have with the bank may give them the "right of offset." That means there may be language in the agreement  that says if you go delinquent on the credit card, the bank can access other accounts in your name.

      Open a new account in another bank, ASAP, and have your SSA and disability checks go to the new account.

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