Washington Collection Laws

Highlights

  • 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.
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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.

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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.

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8 Comments

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  • DJ
    Dec, 2017
    Darren

    We live in Washington State and have fallen behind on our credit card payments. My wife and I have 4 credits cards with $110,000 of debt on them. We also have 4 rental properties with mortgages and the home we live in has a mortgage. I have been paying the mortgages first. My credit score has gone from 800 to 500; so a consolidation loan is out of the question for the credit cards. Can the credit card companies sue me? Can they get a judgement lien on our properties even though credit cards are unsecured debt? Can they garnish my paycheck? Should we consider Chapter 7 Bankruptcy? Chapter 13?

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    • 35x35
      Dec, 2017
      Daniel

      First, please understand that only an attorney can give legal advice. I will share my opinion, but please don't consider it legal advice.

      The only way that a creditor could garnish your income or levy is after suing you and obtaining a judgment. The amount that can be taken from a paycheck or bank account, as well as how much equity is protected in your primary residence is governed by the exemptions allowed by Washington law.

      It isn't clear how much equity is present in each property. That is certainly a key component of any solution.

      In your shoes, I would seek a consultation with a bankruptcy attorney, to see what results you can expect. Find out whether you can discharge the debt through a Chapter 7, what assets (if any) would need to be liquidated, or if a Chapter 13 would be expected and what kind of payment it would likely mandate.

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  • LC
    May, 2017
    Leroy
    Ok I'm at a lose I live in Washington and my power company is trying to get me to pay off a bill from 15 years ago and even thow I informed them I don't no a thing on it and not just that the statue of limitations was up on it they proceeded to add that account from 15 years ago to my current account and then disconnect my power and say I must pay the full thing to have power back what can I do?
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  • RS
    Jan, 2017
    Rich
    I live in a neighborhood with a Homeowners Association. We have lived here over 4 years, built a custom home. About 4 months ago the Association sent us a letter stating they made a mistake and have never sent us a bill for dues. They sent a bill for all back dues and now want to charge us fees and interest because we want to negotiate. They admit they never sent us a bill. Is there a Statute of Limitations on sending a bill in the first place? We live in Washington State.
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    • 35x35
      Apr, 2017
      Daniel
      You ask an excellent question, but it is one that is best directed to an attorney. I don't believe it is exactly a statute of limitations issue, but there may be protections you have about timely notification. On the other hand, it could be that you should very well have known that you owed this money and are on the hook. Speak with a lawyer to get an authoritative answer.
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  • CI
    Feb, 2014
    Clarissa
    Tacoma, WA
    I live in Washington state. I recently obtained a car loan through a finance company called UAC. Since then, I have been current on my payments but on the day my payments are due they call me constantly, e-mail me, and text message me by phone. In the past, they called my landlord twice and multiple members of my family when I have been current on my payments. I understand my credit is bad but must I endure this constant contact from them? Is it even legal? Please help!
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    • BA
      Feb, 2014
      Bill
      I assume the people calling you, your family, and landlord are employed by the original creditor. Washington residents have many protections from collection agents under the federal Fair Debt Collection Practices Act and the Washington Collection Agency Act (mentioned in the article above). However, original creditors are exempt from the FDCPA and the CAA.

      That does not mean original creditors can do as they please. The Washington Consumer Protection Act (RCW 19.86) outlaws unfair or deceptive acts. What you described might be considered unfair under Washington law. Consult with a Washington lawyer who has consumer law experience to learn if you have a cause of action against the lender. If you cannot afford a lawyer, contact the WashingtonLawHelp.org or another Washington pro bono program to find no-cost civil legal services.

      Also, contact the Washington Office of the Attorney General to file a complaint against the lender.
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