Debtors' Rights in a Lawsuit

0204EN – Rev. 11/2013

Debtors’ Rights in a Lawsuit

Introduction • Read the papers carefully The thought of being sued can be scary. A • Mark down on a calendar all the lawsuit can cause emotional and physical dates stated in the documents stress. The best way to protect your rights • Get legal advice, if possible in the lawsuit is pay attention to all the information you get. What court should I appear in? Read this publication if someone sues you The Summons and Complaint will tell you for money. We provide general information. what court you are being sued in. Generally, This publication may help if you need to lawsuits for money are either in Superior represent yourself in court. Court or in District Court. Find more at www.washingtonlawhelp.org. Usually, the amount of money claimed in Look under the category “Consumer and the lawsuit determines which court will Debt” and then “Debt Collection.” You will hear the case. Cases in Superior Court can find publications such as: be for any amount (usually over $75,000). • Debtors’ Rights: Dealing with Cases in District Court can be up to Collection Agencies $75,000. • How to Answer a Lawsuit for Debt There is one exception. The District Court Collection has a separate division called “Small Claims Court.” Under Small Claims Court’s rules: • How to Claim Personal Property Exemptions • The amount at issue in the case can be no more than $5,000. Another publication available at www.washingtonlawhelp.org that might • Small Claims Court can only award help is Small Claims Court. Look under the money damages. It cannot award category “Consumer and Debt” and then personal property such as cars, “Small Claims Court.” We also have equipment, and household furniture information in many other areas of law. or appliances. • Small Claims Court cannot restrain Am I being sued? or enjoin a party. Sometimes debt collectors send multiple This means the court cannot pieces of mail and notices. There is one sure o stop or keep you or the way to know if they are suing you. If you person suing you from taking have gotten documents called a Summons a particular legal act. We and a Complaint, you are being sued. generally call this type of These documents are generally hand- court action an injunction. delivered by a sheriff or a professional An injunction is a court order delivery service. commanding or preventing If you got a Summons and a Complaint, you an action. must:

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• You or the person suing you may not one. All this information must be on have a lawyer present without the top of the Answer. (All this special permission. You may still talk information is on the Complaint.) to a lawyer or get legal advice. 2. A statement saying what you agree  This publication does with and disagree with in the not explain how to put Complaint. If you do not agree with a case on in Small any of the paragraph, deny the Claims Court. Our paragraph. Otherwise, explain which publication called Small parts you disagree with, and why. Claims Court has that a. Example: “I admit statement information. one in the Complaint. I deny statement two in the How do I reply or answer to a Complaint.” Summons and Complaint? 3. If your income is exempt from Once you get a Summons and Complaint, garnishment (see the following you must file an Answer. An Answer is your section “What property cannot be response or defense to the statements taken to pay the Judgment made in the Complaint by the person suing Creditor?”), put a paragraph in your you. The Summons and Complaint usually Answer saying so. have the following information: a. Example: Your only income • The deadline for filing your Answer is Social Security, which is in the Summons federal law exempts from • The Plaintiff is the person suing you garnishment. You could write the following: • The Defendant is the person being i. “My only income is sued (you) Security, which is exempt • What the Plaintiff is claiming from garnishment.” (alleging) happened b. This is not a defense to the • What the Plaintiff is asking for or lawsuit. It does provide the suing you for Plaintiff notice that your • The Court hearing the case income is exempt from garnishment. If you lose the Answering the Complaint can take several lawsuit and the Plaintiff steps. If you disagree with what the Plaintiff garnishes your bank account says, or think the Plaintiff should not get containing exempt funds, what it asked for in the Complaint, you you may have a lawsuit must answer the Complaint in writing. against the Plaintiff. Your written Answer should have: i. What is garnishment? A 1. The name of the court (either garnishment is a court Superior or District Court), the name case the creditor starts to of the Plaintiff and the Defendant, ask the court to order and the court number, if there is you to turn over property or money to cover your 2 0204EN – Rev. 11/2013

debt. The sections “What 7. You must file the original Answer in is a Wage Garnishment?” the court where you were sued. You and “Can a Judgment can file the original copy by Creditor Garnish My Bank delivering it to the Superior Court or Account?” have more the District Court listed on the information. Complaint. 4. If you believe the Plaintiff owes you 8. Keep a copy of the Answer for your money, explain why in writing (this records. is a Counterclaim) If you do not answer within twenty a. What is a Counterclaim? A days, you will be in “default.” If you did counterclaim is a claim for not deliver an Answer to the Plaintiff’s relief or compensation made lawyer or the Plaintiff within the against the Plaintiff. Think of twenty-day period, and the court has it as a counteraction the not entered an Order of Default, Defendant takes against the immediately file and serve an Answer as Plaintiff. explained above. b. There is a filing fee for a What does it mean to default? A Counterclaim. Superior default is a failure to timely answer Courts charge $200 for a a Complaint. If you default, Plaintiff counterclaim. District Courts can win without further notice to may charge $53. you. 5. Your signature, address, phone I filed my Answer. Now what? number, and the date. After you have filed and delivered your 6. You must deliver a copy of your Answer, the Plaintiff may want to settle the Answer to the Plaintiff’s lawyer, or case to avoid going to trial. You also may the Plaintiff if s/he does not have a want to try negotiating with Plaintiff. lawyer, within twenty days after you got the Summons and the There may be a trial if the case does not Complaint. The Plaintiff’s lawyer or settle. Or the court may resolve the case by the Plaintiff must get your Answer motion or other proceedings. One type of within twenty days after you are proceeding is called arbitration. Some served with the Summons and the counties require mandatory arbitration. Complaint. There are two ways to  Arbitration is a form of deliver the Answer: dispute resolution. A third a. You can deliver the Answer party who both the Plaintiff in person to the Plaintiff’s and Defendant (you) agree lawyer or the Plaintiff. If that on usually mediates. The person does not have a decision of the arbitration is lawyer, get a stamped legally binding. “received” copy to prove you delivered a copy. There may be other steps before a trial begins, such as motions or pre-trial b. You can deliver the Answer proceedings like discovery. using certified mail. 3 0204EN – Rev. 11/2013

At trial, you may ask questions of the The Judgment Creditor can collect by: Plaintiff and other witnesses. You may also • Garnishing your wages or bank tell your side of the story through your own account testimony, your witnesses, and papers that support your case. • The sheriff can sell your personal property (cars, appliances) or real If you are going to represent yourself, go to property (house and land) the courthouse a few days before your trial. Watch other cases so you know what to • You can voluntarily pay the expect. judgment or try to work out a payment plan with the Judgment What if I lose at trial? Creditor If you lose at trial, the judge will sign an The Judgment Creditor may not: order stating you owe the Plaintiff money. • Garnish your wages or take your This is a “Judgment.” The Plaintiff who has property without a court order won a judgment is now a “Judgment Creditor.” If the Plaintiff loses, the judge • Come into your home or your will sign an order to that effect. garage to take your possessions, unless you voluntarily let the If you have a counterclaim and you win on Judgment Creditor in or the it, the judge will sign an order stating the Plaintiff owes you money. This makes you Judgment Creditor has a court order repossession the “Judgment Creditor.” allowing the . Repossession is the act or an You, as well as the Plaintiff, may appeal the instance of retaking property. judge’s decision.  If you have bought a car or The Judgment Creditor has ten years to other property, and have put collect on the judgment, and may renew that property up as collateral the judgment for one more ten-year period. or security for a loan for that purchase, that Creditor may How can a Judgment Creditor be able to repossess the collect? property without a court Going through the process and losing a order. The Creditor may not lawsuit can be hard emotionally and repossess if the repossession mentally. But remember: You cannot go to will cause a “breach of jail for not paying a judgment (except, peace.” If you vigorously rarely, for refusing to pay a child-support object to the repossession, judgment the court has found you can the Creditor should stop the afford to pay). repossession action, and go But: If you are ordered to appear for an to court. examination of your finances and you do not appear, you can be arrested. These Can they take any/all my property types of examinations are called to pay the Judgment Creditor? “Supplemental Proceedings.” The section No. By law, there are certain kinds of “What are Supplemental Proceedings?” has property that generally a judgment creditor more information.

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generally cannot take from you. We call this bank account. Note: this $200 in a “exempt property.” bank account is in addition to any The main exemptions are: money in the bank account that is exempt, such as TANF, SSI, SS, and • Temporary Assistance for Needy so on. Families (TANF), Supplemental Our publication called Money That Cannot Security Income (SSI), Social Security be Taken from You (“Garnished”) to Pay Off (SS), Unemployment Compensation, a Debt has more information. Workers’ Compensation, and pension and retirement benefits; • Part of your wages: The greater of  The Judgment Creditor must 35 times the current federal get a court order to garnish minimum wage, or 75% of your net or sell your property through wages. (“Net wages" means gross the sheriff. If you are going pay minus taxes, Social Security, and to claim personal property other mandatory deductions.) Call exemptions, read the the Department of Labor to find out publication How to Claim the current federal minimum wage, Personal Property or check this website: Exemptions. http://www.dol.gov/esa/whd/flsa/. (Effective 2012, the minimum wage What is a wage garnishment? is $7.25 an hour.) Then multiply that A wage garnishment happens when the amount by 35; Judgment Creditor gets payment of the • Clothing; court award by taking money directly from • Household goods, appliances, your paycheck through your employer. furniture, provisions and fuel, up to The Judgment Creditor and your employer $2,700 in value for one person, must do the following to garnish your $5,400 for a married couple; wages: • Equity in two motor vehicles for a 1. Send a “writ of garnishment” to married couple up to a combined your employer value of $5,000; a. What is a writ of What is Equity? Equity is the value of garnishment? It is a court an item, minus what is owed on it, order stating the Judgment and minus any debts on which it is Creditor has a right to been listed as collateral collect a particular amount of money/property from a • Equity in a home up to $125,000; third party (example: your • Tools and instruments necessary to employer). carry on a trade up to $5,000 in 2. Your employer must then file an value; “Answer” telling the Judgment • Other property not more than Creditor and the court how much of $2,000, including no more than $200 your wages they will garnish and in cash and no more than $200 in a how much you will get. Your

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employer must figure out how The Judgment Creditor sends a writ of much of your wages are exempt garnishment to your bank. You are not and pay you that amount. entitled to notice of a bank garnishment. If they garnish your account, you may have 3. The employer must hold the rest for the Judgment Creditor. checks returned for NSF (not sufficient funds). 4. You should get a copy of both the are “writ of garnishment” and the You entitled to information about the “Answer.” bank account garnishment. You must get a copy of: The exempt part of your net wages is the • greater of 35 times the current federal The Writ of Garnishment minimum wage or 75% of your net wages. • Exemption claim form ("Net wages" means gross pay minus taxes, Note: Funds in a bank account from certain Social Security, and other mandatory sources are exempt from garnishment. Here deductions.) Call the Department of Labor are some exempt funds: to find out the current federal minimum wage. Then multiply that amount by 35. • TANF • Social Security  Example: Effective 2012, the • SSI federal minimum wage is • All “federally qualified” pension $7.25 an hour. If you make and retirement benefits less than $253.75 a week net, all of your wages are Your bank will not claim your exemptions exempt. If you make $400 a for you. You must claim them yourself. The week, $300 is exempt. ($300 exemption claim form is included with the is 75% of your wages, and court papers for this purpose. The form that amount is more than should include instructions on how to claim $253.75.) exemptions. You should file this form right away. Remember: you can claim an automatic $200 exemption in your bank account. Can I be fired because my wages are garnished? Can a Judgment Creditor sell my No. It is illegal for an employer to fire you personal property? because it has to garnish your wages. Maybe. A Judgment Creditor may get a There is one exception: your employer can “Writ of Execution” from the court telling legally fire you if it has to garnish your the sheriff to take your property and sell it. wages for three different judgments during The Judgment Creditor gets the money a twelve-month period. from the sale.  You may prevent the sheriff Can a Judgment Creditor garnish my from taking your exempt bank account? property by claiming your Maybe. A bank account garnishment exemptions. process is a lot like a wage garnishment. 6 0204EN – Rev. 11/2013

Make a list of all personal property • Someone who has provided (household furniture and appliances, cars, materials used on your home tools and equipment). Put a “*” next to • A Lender trying to foreclose a items you claim are exempt. mortgage on your home because At the bottom of the list, write: you have not repaid the loan “I declare under penalty of perjury  The homestead law under the laws of the state of protects mobile homes Washington that the foregoing is a list as well as houses. of my household furnishings and appliances (or tools or motor vehicles) What are supplemental and I believe the items I’ve marked proceedings? with a ‘*’ are exempt from attachment.” A Judgment Creditor may get an “Order for Examination of Judgment Debtor,” “Notice If the sheriff comes to take your property, of Supplemental Proceeding” or “Order to present the list. The sheriff cannot take Show Cause re: Supplemental Proceedings” your property without further proceeding if it wants to find out: to determine the value of the items claimed as exempt. • whether you work •  Our publication called where you keep your money How to Claim Personal • what property you own. Property Exemptions This will require you to appear in court to has more information answer questions. You must comply with and forms you can use. the order by appearing in court or a warrant will be issued for your arrest. Can a Judgment Creditor sell my real property? When you appear in court, wait until the judge calls your case. Usually, the judge will Maybe. A Judgment Creditor may try to ask you to go to a separate room with the have the sheriff sell your real property Judgment Creditor’s lawyer. The lawyer will (land, house, and other buildings). then ask you questions about your The homestead law protects up to $125,000 property. If the lawyer treats you badly, of equity in your home from most Judgment stop the examination. Go back and tell the Creditors. If you live on the property judge. Examples of when to do this: claimed as a homestead, the exemption is • The lawyer is rude automatic. You do not need to file anything. If you are claiming a homestead exemption • The lawyer asks questions that do on property that you are not currently living not make sense on, you must file a homestead declaration. • The lawyer is looking for irrelevant The homestead exemption does NOT work info against: You do not have to answer a question if • A worker who has worked on you think the answer would be an your home admission of a crime. If you think this might be the case, ask the judge for time to talk to

7 0204EN – Rev. 11/2013 a lawyer. Our publication called using your preferred TTY or Video relay Supplemental Proceedings has more service. information. • King County: Call 211 for information and referral to an appropriate legal What if I need legal help? services provider Monday through Friday from 8:00 am – 6:00 pm. You may • Apply online with CLEAR*Online - http://nwjustice.org/get-legal-help also call (206) 461-3200, or the toll-free or number, 1-877-211-WASH (9274). 211 works with a language line to provide • Call CLEAR at 1-888-201-1014 callers free interpreters as needed. Deaf CLEAR is Washington’s toll-free, centralized and hearing-impaired callers can call 1- intake, advice and referral service for low- 800-833-6384 or 711 to get a free relay income people seeking free legal assistance operator. They will then connect you with civil legal problems. with 211. You can also get information on legal service providers in King County • Outside King County: Call 1-888-201- through 211’s website at 1014 weekdays from 9:10 a.m. until www.resourcehouse.com/win211/. 12:25 p.m. CLEAR works with a language line to provide free interpreters as • Persons 60 and Over: Persons 60 or needed to callers. If you are deaf or over may call CLEAR*Sr at 1-888-387- hard of hearing, call 1-888-201-1014 7111, regardless of income.

This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice. This information is current as of November 2013.