Statute of Limitations Between States for a Deficiency
TL:DR- Car loan started in MD, moved to IA - Repo. Trying to figure out the statute of limitations on a deficiency balance
2008 - Purchased auto in MD
2009 - Moved to IA
2010 - Car was voluntarily repo'd because of not being able to make payments
2010 - Car was sold at auction, I was given documents stating my deficiency balance
2014 - Have not heard anything from anybody about this debt.
I am trying to figure out what the statute of limitatations would be for this debt.
What state applies? MD since that is where the loan originated, or IA since that is where I moved to and defaulted.
I've heard that the Iowa UCC code says it is 4 years on deficiency balance, and others tell me that it still applies to the 10 year written contract.
I'm confused and would like to know what applies to this deficiency balance.
Re: Statute of Limitations Between States for a Deficiency
The rules that apply are the state they sue you in. Written contracts in Iowa is indeed ten years, however there's a clause that says if that if the state you resided in previous has a shorter statute of limitations, that shorter period applies. However, written contracts "under seal" (almost certainly yours was, or it only is three years) have a duration of 12 years (not to mention tolling is probably in effect).
The 4 year UCC sol applies to sales contracts. This is not a sales contract but a note independent from the sale in most cases.
Re: Statute of Limitations Between States for a Deficiency
thanks for the quick response.
I am unsure what 'tolling" is as this is the first time I have heard of it.
Also unsure if the written contract was "under seal." Purchased auto at a dealership, loan originator was Suntrust bank.
So how do I ensure that I am indeed allowed to use the Maryland SOL (which is 3 years for written contract?) instead of the Iowa SOL. Do I automatically get that right since when the loan was inititiated I resided in MD?
Re: Statute of Limitations Between States for a Deficiency
Tolling means the statute of limitations clock is put on hold. Typically this occurs when you leave the state.
Under seal can mean little more than the word 'seal' was printed next to where you signed your name.
Again, it all depends on what court they sue you in. Until you actually get a suit filed against you, all this is talk.
Re: Statute of Limitations Between States for a Deficiency
True. I am just trying to figure out where I stand. I am trying to work on my credit report and this is the only negative on it. I just don't want to wake up a sleeping giant by validating debt if it is not out of the SOL.
Re: Statute of Limitations Between States for a Deficiency
What do you think you are doing? Validating the debt is almost always wasted effort. There's little you can do to get this off your credit until the seven years expire.
How much of a deficiency do you think there was?
Re: Statute of Limitations Between States for a Deficiency
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flyingron
The rules that apply are the state they sue you in.
Many (but not all) states have borrowing statutes that can potentially bring in the statute of limitations from the state where a cause of action accrued, if shorter than the limitations period for the forum state. From what we've been told, the cause of action accrued in Iowa, so if the OP continues to reside in Iowa that's ordinarily where a cause of action should be filed and it would apply its own statutes.
It looks like Iowa courts apply a ten year limitations period, with the cause of action accruing at the time of default.
Re: Statute of Limitations Between States for a Deficiency
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Quoting
flyingron
What do you think you are doing? Validating the debt is almost always wasted effort. There's little you can do to get this off your credit until the seven years expire.
How much of a deficiency do you think there was?
It's about 8,000. I'm trying to figure out the best way to put this behind me. I don't have 8k to settle the debt. I have not heard anything about the debt since the repo occured.
I assumed that I could potentially validate the debt and if they could not validate then I could work on getting it off my credit report, but if the SOL will occur in IA then it looks like I have no choice but to work on getting it paid off. I didnt realize the SOL was so long in IA.
I basically don't know the best way to approach this besides saving up and trying to work with whoever owns the debt now on getting it paid off.
Re: Statute of Limitations Between States for a Deficiency
Understand that all they have to do to validate the debt is say "Yes, that is his debt." This isn't a "show me the paper" level of proof. It also has squat to do with your credit score NOR does the FDCPA requirement for validation even likely apply here.
I'd leave it be. If they haven't bothered to sue for the deficiency in the past four years, it's quite possible they've just writte it off.
Nothing you can do right now will improve the ding on your credit much.
Re: Statute of Limitations Between States for a Deficiency
Hey thanks flyingron for the advice. It's much appreciated!