wa-law.org > bill > 2025-26 > SB 5720 > Substitute Bill
This chapter may be known and cited as the uniform consumer debt default judgments act.
The legislature enacted critical protections for consumers in 2020 through the passage of Substitute House Bill No. 2476 regarding debt buyers. In enacting the uniform consumer debt default judgments act, the legislature intends to broaden those protections by: (1) Expanding requirements and remedies previously applicable only to debt buyers to be applicable to all holders of purchased debt and any affiliates; and (2) imposing new disclosure requirements in all actions to collect consumer debt and new remedies in actions in which those requirements are not satisfied.
"Affiliate" has the same meaning as provided in RCW 48.31B.005.
"Charge off" means a creditor's removal of a consumer debt as an asset from the creditor's financial records.
"Consumer" means an individual named as a defendant in an action for collection of a consumer debt to which this chapter applies.
"Consumer debt" means an obligation or alleged obligation of an individual to pay money that arises out of a transaction in which the money, property, insurance, or service that is the subject of the transaction is primarily for a personal, family, or household purpose.
"Creditor" means a person to which a consumer debt is owed at the time of the itemization date. If purchased debt is owed on the itemization date, the "creditor" is the person to whom the purchased debt was owed immediately prior to the time the debt was purchased or acquired.
"Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
"Finance charge" has the meaning in section 106 of the truth in lending act, 15 U.S.C. Sec. 1605.
"Itemization date" means any of the following:
Date of charge off;
Date of any default or date the creditor becomes aware of any default;
Date of disposition of property that secured the debt;
Date of last statement provided by the creditor;
Date of last payment;
Date of transaction;
Date of any arbitration award; or
Date of assignment or transfer of the debt to a third party for the purposes of the third party collecting the debt for the assignor or transferor.
"Medical debt" has the same meaning as provided in RCW 19.16.100.
"Outstanding balance" means the amount owed on a consumer debt on the itemization date.
"Person" means an individual, estate, business or nonprofit entity, government or governmental subdivision, agency, or instrumentality, or other legal entity.
"Purchased debt" means debt that is purchased or ownership of which is acquired after having been incurred by the consumer.
"Record" means information:
Inscribed on a tangible medium; or
Stored in an electronic or other medium and retrievable in perceivable form.
"Secured consumer debt" means a consumer debt secured by real or personal property.
"Sign" means, with present intent to authenticate or adopt a record:
Execute or adopt a tangible symbol; or
Attach to or logically associate with the record an electronic symbol, sound, or process.
"Unsecured consumer debt" means a consumer debt not secured by real or personal property.
Except as provided in subsection (2) of this section, this chapter applies to the award of a default judgment in an action for collection of:
An unsecured consumer debt;
A secured consumer debt if the action is brought solely to obtain a money judgment; or
A deficiency that remains after disposition of property that secured a consumer debt.
This chapter does not apply to:
An action to take possession of or dispose of real or personal property, even if the action includes a request for a money judgment; or
An action to collect a debt owed to a government, governmental subdivision, or agency in which the government, governmental subdivision, or agency is the plaintiff.
A default judgment in an action to which this chapter applies may be entered only if the complaint or amended complaint complies with this section and includes the notice required under section 6 of this act.
If the plaintiff amends a complaint before a responsive pleading is made, causing it to comply with this section or include the notice required under section 6 of this act where it did not previously, the personal jurisdiction of the court over the defendant is voided and is acquired again only when the amended complaint is served on the defendant as though it was the original complaint.
The complaint or amended complaint must state:
The name and the last known city, county, state, and zip code portions of the address of each consumer named in the complaint in the records of the creditor;
For medical debt, the name of the provider or facility associated with the debt on the itemization date;
The name of the creditor, including any merchant brand, affinity brand, or facility name associated with the debt;
At least the last four digits of the account number or other account identifier used by the creditor in communicating with the consumer before the itemization date;
The date of the last payment, if applicable, or the date of the last transaction;
The date of charge off or, if the debt was not charged off, the date of default;
The amount of the outstanding balance;
The amount of the judgment the plaintiff seeks, stating the outstanding balance and itemizing the following amounts not included in the outstanding balance:
Total finance charges;
Total fees or costs; and
Total credits and payments;
Whether the amount of the judgment may increase due to accrued interest, attorney fees, or other amounts;
The authority of the plaintiff to commence the action;
Facts sufficient to demonstrate that, to the plaintiff's knowledge, the action is being commenced in a proper venue;
Facts sufficient to demonstrate that the action is being commenced within the statute of limitation period applicable to the debt; and
If the plaintiff is bringing an action to recover purchased debt on behalf of a person who holds purchased debt:
That the action is being brought by, or for the benefit of, a person that is engaged in the business of purchasing debt for collection purposes;
The date the debt was purchased;
The identity of the person from whom or which the debt was purchased;
That the plaintiff may have purchased this debt for less than the value stated in the complaint;
If the debt was at any time sold without any representation or warranty of accuracy, a statement to that effect; and
Subject to authentication that satisfies the requirements of rule 803(a)(6) of the rules of evidence and RCW 5.45.020 or is otherwise authorized by law or rule, the plaintiff must attach to the complaint or amended complaint:
At least one of the following that is sufficient to demonstrate the existence of the consumer debt:
A copy of an agreement signed by the consumer evidencing the original debt;
A copy of the most recent monthly statement recording a purchase, payment, or extension of credit; or
A record otherwise demonstrating the debt was incurred;
If the action is to recover purchased debt, a copy of the assignment or other writing establishing that the person asserting ownership of the debt is the owner of the debt. If the debt was assigned more than once, each assignment or other writing evidencing transfer of ownership must be attached to establish an unbroken chain of ownership, beginning with the original creditor to the first person who held purchased debt and each subsequent sale;
If the action is based on a credit card debt for which a signed writing evidencing the original debt does not exist, a copy of the most recent monthly statement recording a purchase transaction, payment, or other extension of credit; and
If the action is based on a breach of contract, a copy of the terms and conditions in place at the time of the most recent monthly statement recording a purchase transaction, payment, or extension of credit must also be attached.
A default judgment may be entered in an action to which this chapter applies only if the complaint or amended complaint served on the consumer includes, or is accompanied by, a notice warning that a default judgment may be awarded against the consumer in no less than 10 point type.
The notice must be substantially similar to the form in subsection (3) of this section that states:
If the consumer does not file an answer to the complaint or amended complaint, a default judgment may be entered against the consumer;
If a judgment is entered against the consumer, the amount of the judgment, plus interest on the judgment as provided by other laws of this state, could remain in effect for up to 20 years, even if the judgment is not credit reported or no longer remains on the consumer's credit report;
After entry of a judgment, the plaintiff may, but will not necessarily, take steps to sell real estate owned by the consumer, sell personal property owned by the consumer, attach the consumer's bank accounts, or garnish the consumer's wages;
Entry of a judgment may in some circumstances impair access to employment, insurance, credit, or housing;
An attorney may provide assistance in understanding the complaint or amended complaint and advice about what action to take in response to the complaint or amended complaint; and
Contact information for a legal aid or attorney referral service that may be able to help the consumer find an attorney, and if the consumer cannot afford an attorney, may be able to provide free or reduced-cost legal services.
The following notice meets the requirements of this section:
Consumer Notice
This notice is required to be given to you by law and its content is prescribed by law; this notice and its content are not statements, representations, or threats by, nor advice from, the plaintiff or the plaintiff's attorney.
The plaintiff named in the complaint has filed a lawsuit against you to collect money that the plaintiff says you owe.
A judgment may be entered against you if you do not file a response to the lawsuit.
Your personal property may be taken and sold. Money may be taken directly from your bank account or wages. A lien may be put on your house or other real estate and the house or real estate may be sold. These are things that could happen, although they won't necessarily happen.
If the judgment is not paid in full, the amount due may grow because of interest charges.
You could owe the amount of any unpaid judgment for up to 20 years, even if it is not credit reported or it no longer appears on your credit report.
The judgment may make it harder for you to get a job or insurance and more expensive for you to get a loan or credit card, rent an apartment, or buy a house or car.
If you talk with a lawyer, the lawyer can explain the situation and help you decide what to do. If you cannot afford a lawyer, you may be able to obtain one for free or reduced cost. You may call 211 for a referral to legal counsel.
If a plaintiff in an action to which this chapter applies fails to comply with any requirement of this chapter, the court may deny the plaintiff's motion for default or default judgment and may on motion of a party or on the court's own motion issue a notice that the court will dismiss the case without prejudice unless, within 30 days following the sending to the plaintiff of such notice of intent to dismiss, the plaintiff submits for filing an amended complaint that complies with this chapter.
The commission or facilitation of an act or practice in violation of this chapter by a person who holds purchased debt or any affiliate while attempting to collect purchased debt are declared to be unfair acts or practices or unfair methods of competition in the conduct of trade or commerce for the purpose of the application of the consumer protection act found in chapter 19.86 RCW. In addition, violations of this chapter while attempting to collect purchased debt shall subject the person who holds purchased debt or any affiliate to the penalty in RCW 19.16.450.
A waiver by a consumer of a requirement of this chapter is void. This section does not prevent a voluntary settlement agreement or judgment between the parties that does not result in a default judgment.
This chapter supplements rights and remedies available to a consumer under other laws of this state.
In applying and construing this uniform act, a court shall consider the promotion of uniformity of the law among jurisdictions that enact it.
This chapter modifies, limits, or supersedes the electronic signatures in global and national commerce act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the notices described in 15 U.S.C. Sec. 7003(b).
This chapter applies to an action commenced on or after the effective date of this section.
No collection agency or out-of-state collection agency may bring or maintain an action in any court of this state involving the collection of its own claim or a claim of any third party without alleging and proving that he, she, or it is duly licensed under this chapter and has satisfied the bonding requirements hereof, if applicable: PROVIDED, That in any case where judgment is to be entered by default, it shall not be necessary for the collection agency or out-of-state collection agency to prove such matters.
A copy of the current collection agency license or out-of-state collection agency license shall be prima facie evidence of the licensing and bonding of such collection agency or out-of-state collection agency as required by this chapter.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
This act takes effect January 1, 2027.