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  1. #1

    Default Statute of Limitations for Debt

    I have a few questions on state statutes of limitation.

    1) Let's say that I signed a promissory note to make payments once a month, and at some point, stop paying. Let's say I stop paying on January 1st. Let's say I go into default on July 1st. Let's say my state has a three year statute of limitations. When did the statute begin running? Was it on the day I made my last payment? Was it on the day I defaulted? Or some other day?

    2) Let's say I live in North Carolina and the statute of limitations has run on a defaulted promissory note. Let's say the creditor sues me, I use the statute as a defense, and the case is dismissed. Now let's say that I move to Virginia, which has a longer statute of limitations that hasn't run yet. Will the creditor be able to sue me in Virginia for the same debt even though the case has already been litigated and dismissed in North Carolina?

    3) Is there anything to really stop debtors from gaming the system based on statutes of limitations? That is, could a debtor who lives in a state with an SOL of 4 years wait until 3.5 years is up since the SOL started running, and then move to a state with a 3 year SOL? Wouldn't that pretty much prevent the creditor from suing? And since a lot of creditors wait until the SOL is almost up to sue, how do courts deal with this? Or is this so rare that no one really cares?

  2. #2
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    Default Re: Statute of Limitation

    Google "tolled statute of limitations".

    Debtors can't easily run away....

  3. #3
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    Default Re: Statute of Limitation

    Let's NOT say "let's say" anymore.

    And since a lot of creditors wait until the SOL is almost up to sue, how do courts deal with this?
    as long as the suit is filed before the SoL has run, it stops the running of the SoL.

    That is, could a debtor who lives in a state with an SOL of 4 years wait until 3.5 years is up since the SOL started running, and then move to a state with a 3 year SOL? Wouldn't that pretty much prevent the creditor from suing
    ?generally, no. In fact, in many states, it actually stops the SoL from running due to leaving the jurisdiction of the courts that have jurisdiction over the matter.

  4. #4

    Default Re: Statute of Limitation

    In fact, in many states, it actually stops the SoL from running due to leaving the jurisdiction of the courts that have jurisdiction over the matter.
    I understand that the SOL may be tolled depending on the state. But what sort of jurisdiction would the courts of State A, where the defendant used to live, have over the matter if the defendant is now a resident of State B? Wouldn't the defendant have to be sued in State B, where he currently resides, and wouldn't the procedural law of State B be applied, including its SOL?

  5. #5
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    Default Re: Statute of Limitation

    If you want to know about a specific case with specific states, identify the states.

    If you are trying to figure this out for every state, you can find state statutes online, usually through state legislature websites, and you can search case law on free sites such as LexisOne and Google Scholar (or pay for access to more complete databases).

  6. #6

    Default Re: Statute of Limitation

    Quote Quoting Mr. Knowitall
    View Post
    If you want to know about a specific case with specific states, identify the states.

    If you are trying to figure this out for every state, you can find state statutes online, usually through state legislature websites, and you can search case law on free sites such as LexisOne and Google Scholar (or pay for access to more complete databases).
    It's a hypothetical case right now, but with the potential to become real at some point I suppose. In this case, the specific states would be Virginia and North Carolina. Virginia would be the state where the debtor used to live and where the debt was incurred. North Carolina would be the state where the debtor currently resides.

  7. #7
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    Default Re: Statute of Limitation

    Lawsuits in North Carolina are governed by its borrowing statute:
    Quote Quoting § 1‑21. Defendant out of State; when action begun or judgment enforced.
    If when the cause of action accrues or judgment is rendered or docketed against a person, he is out of the State, action may be commenced, or judgment enforced within the times herein limited after the return of the person into this State, and if, after such cause of action accrues or judgment is rendered or docketed, such person departs from and resides out of this State, or remains continuously absent therefrom for one year or more, the time of his absence shall not be a part of the time limited for the commencement of the action or the enforcement of the judgment. Provided, that where a cause of action arose outside of this State and is barred by the laws of the jurisdiction in which it arose, no action may be maintained in the courts of this State for the enforcement thereof, except where the cause of action originally accrued in favor of a resident of this State.

    The provisions of this section shall not apply to the extent that a court of this State has or continues to have jurisdiction over the person under the provisions of G.S. 1‑75.4.

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