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  1. #1
    Join Date
    Jun 2011
    Posts
    11

    Question What Statute of Limitations Applies to a Loan With Choice of Law and Venue Clauses

    My question involves collection proceedings in the State of: CA, NV


    There is a promissory note which contains the following clause:

    "Governing Law: Venue – I understand that the Lender is located in the State of Utah and this Note will be entered into in the same State. Consequently, the provisions of this Note will be governed by federal laws and the laws of that State to the extent not preempted, without regard to conflict of law rules."

    If the debtor lives in CA or NV where the statute of limitations is 4 years and 3 years respectively for promissory notes, are courts in those jurisdictions likely to apply Utah's SOL of 6 years or the more favorable local ones for a bad debt suit ? I have heard the shorter period is generally used, however with the above clause it becomes unclear.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Choice of Venue / Conflict of Law

    The rules that apply are first and foremost determined by where the lawsuit is filed. What makes you think you won't be sued in Utah?
    Some states have provisions in their limitations laws that provide for adopting the other states limitations (generally making them shorter) but I don't think California or Nevada are such states (someone else may speak up).

    You're wrong on the Nevada statute of limitations. It is six years for obligations on written contracts (which almost all credit notes are).
    Four years is right for California.

  3. #3
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Choice of Venue / Conflict of Law

    Another issue.

    You put this question under student loans.

    Student loans might not be subject to a statute of limitations.

    If you are thinking of defaulting I suggest you consult an attorney about any potential lifelong liabilities.

  4. #4
    Join Date
    Jun 2011
    Posts
    11

    Default Re: Choice of Venue / Conflict of Law

    I've seen on here several times if its not on the NLSDS it's got a regular state SOL. Also this type doesn't confirm with the school which all of those types (federal + private) must. It was privately funded. It's already been 3 years since DOFD and they have done very little other than a couple call attempt from assigned collectors, and nothing in over a year. It is in fact a promissory note, including identifying itself as "Loan Application and Promissory Note".

    I referred to http://www.govcollect.org/files/Neva...Collection.pdf , but it seems I am essentially judgement proof since I lost my job. I don't have any non-exempt assets to take anyway. I assume they are monitoring credit for say a mortgage application or some other indication of income/assets, which is why I don't open any accounts. I do not see how they can sue the consumer except in that person's own state (or at least be served?), or they need to domesticate it.

    I am trying to know when it is safe to open a business or otherwise "act normally". I do not think fraudulent conveyance comes into play unless you perform certain actions after a suit has initiated. Other than that, allocating resources to an LLC pretty much shields them from personal claims. I just don't know if my risk exposure is finished yet.

  5. #5
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Choice of Venue / Conflict of Law

    Other than that, allocating resources to an LLC pretty much shields them from personal claims
    Chortle. No.

    They can sue you in the state you took the loan out in or in some state you (or your assets) exist now. Again, given the absolute lack of information it's hard to say. However, again Nevada has a six year SOL in this case.

    You don't domesticate lawsuits, you just file them. Domesticate is something you do to perfect judgements issued by other states.
    NLSDS is a good indicator, but it's NOT DEFINING (no matter what you read). If it was a public (i.e., federally backed loan) you won't get a SOL discharge. If it's purely private backed, then you may.

    What is the exact nature of the loan? Who was the lender? Was there a federal program involved?
    Where was it taken out? What was the institution?
    Where do you live now?

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