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72 Just days after the Washington State Supreme Court denied West Coast Servicing Inc.'s petition for review of the Division I Court of Appeals decision in Luv v. West Coast Servicing Inc., Division I abruptly changed course, positively clarifying years of state and federal court's misinterpretation of their previous decision. A borrower's bankruptcy discharge does not start the six-year statutory period for enforcing the entire debt. Since 2016, the bankruptcy discharge acceleration theory has resulted in losses for many lenders in Washington and has even found footing in other states like Colorado, Arizona, and Nevada. is article will explain how we got here and explore the spread of related decisions in other states. HOW WE GOT HERE: THE EDMUNDSON DICTA e Washington statute of limitations on written contracts and enforcement of negotiable instruments is six years. Absent acceleration, if the contract is repaid in installments, the six years runs against each installment as it becomes due. If acceleration or maturity occurs, the six years runs against the entire debt from the date of acceleration or maturity. It has been well settled law that acceleration could only be triggered through the actions of the lender, as written in the contract itself. Initially, the 2016 opinion in Edmundson v. Bank of America, N.A., appeared to merely confirm that: (a) the statute of limitations applies differently to contracts payable on demand and installments; and (b) the borrower's bankruptcy discharge did not effectively void the deed of trust and note based upon the borrower's lack of personal liability. Quoting the 1945 Washington State Supreme Court decision, Herzog v. Herzog, the court in Edmundson wrote, "when recovery is sought on an obligation payable by installments, the statute of limitations runs against each installment from the time it becomes due; that is, from the time when an action might be brought to recover it." e court in Edmundson then reasoned that the statute of limitations accrued each month until the borrower no longer had personal liability under the note, i.e., the date of their bankruptcy discharge. e problem with this interpretation is that it was equating the lack of personal liability with calling the loan due, signaling that an "action might be brought to recover it" as stated in Herzog. If we were to rely on Edmundson's interpretation of Herzog, then immediately upon discharge, the lender should commence enforcement proceedings, regardless of the borrower's continued payments, because the court is deeming the loan due in its entirety and accrued for recovery. Of course, taking this approach could harm borrowers who are Feature By: Laura N. Coughlin and Robert Finlay BANKRUPTCY DISCHARGE DOES NOT ACCELERATE ENTIRE DEBT Attorneys Laura Coughlin and T. Robert Finlay explain a recent ruling where a borrower's bankruptcy discharge does not start the six-year statutory period for enforcing the entire debt.

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