Collection of stale debt in Washington – the Eng case.

Claims for unpaid debt are subject to the Washington statute of limitations.  When the limitations period expires, the debt is no longer enforceable.  But the debt technically does not go away.  It is still owed.  And traditionally the debt could still be demanded in Washington, notwithstanding the expiration of the statute of limitations.  And because statute of limitations is an affirmative defense, it had to be asserted by the borrower. 

Eng v. Specialized Loan Servicing, 20 Wn. App. 2d 435, 500 P.3d 171 (2021) changes the analysis, at least from a practical standpoint.  In Eng, the lender made a demand on the borrower to pay a time-barred debt.  The demand was technically accurate; the debt was unpaid and owing.  The Court, however, held the demand was in violation of Washington’s consumer protection statute because demanding stale debt was capable of consumer deception.  The Court suggested the language of the demand could be adjusted to avoid deception, for example, explicitly advising the borrower of the statute of limitations defense.  

Consumers should seek the assistance of Washington counsel if they receive demands or statements concerning what may be stale debt. Creditors seeking to enforce potentially stale debt should likewise seek assistance in crafting language to avoid deception. It is not intuitive that creditors would need to advise a debtor of a potential affirmative defense in a claim statement, but that is the landscape following Eng.