- 7 min read
- 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.
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:
|Spoken contract||3||RCW 4.16.080|
|Written contract||6||RCW 4.16.040|
|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.|
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 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:
- A debt collector may communicate with you or your lawyer, and not third parties about your debt
- 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.
- 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.
- 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.
Consult with a Washington lawyer who is experienced in civil litigation to get precise answers to your questions about liens, levies, garnishment, and foreclosure.
Struggling with debt?
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q3 2023 was $17.291 trillion. Student loan debt was $1.599 trillion and credit card debt was $1.079 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Collection and delinquency rates vary by state. For example, in South Carolina, 17% have student loan debt. Of those holding student loan debt, 10% are in default. Auto/retail loan delinquency rate is 7%.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.