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About Jack Hall
Expertise
Will answer questions about consumer or small business bankruptcy, foreclosure, evictions, wage garnishment, bank account seizures by creditors, creditor harassment, repossession and/or surrender of vehicles and other personal property, and civil lawsuits seeking to collect credit card and other debts. Can also answer questions relating to debt management and the effect of bankruptcy on one’s credit history. Can discuss the various options an individual or business may have relating to pressing financial difficulties. In addition to sending me an email, You can also call me at this number if you want to discuss any question on the telephone: 915 261-3893

Experience
Over thirty years of experience assisting clients in all aspects of debtor/creditor relationships. This experience has primarily involved assisting individuals and small businesses that are having financial difficulties, and have also had some experience assisting creditors attempting to recover financial losses.

Education/Credentials
Law degree (Juris Doctorate, J.D.); Bachelor of Arts and Masters degrees in political science/government

You are here: Experts > Business > Corporate Law > Collections Law > Foreclosure Collections Statute of Limitations

Collections Law - Foreclosure Collections Statute of Limitations

Expert: Jack Hall - 11/10/2009

Question
I have found conflicting information on the Internet. I don't understand that because the Internet is always right.

Situation:
Mortgage secured in August 2001 in North Carolina
Last payment made June 2004
Foreclosed November 2004
Apparently sold back to lender at auction January 2005 (based on deed recording date)
Sold to current owner April 2004

This note is recognized as being valid but there has not been a means to pay. There is income but it hovers around the poverty level. The only current assets are two $3000 cars.

How long does the lender have to secure a judgment to collect on the debt? (Conflicting internet info says 3, 5, 6, or 10 years)
When does this time start?
If a judgment is received, how would it affect this family given the current income and assets?
How long would a judgment be valid for?

Thank you very much.

Answer
How long does the lender have to secure a judgment to collect on the debt? (Conflicting internet info says 3, 5, 6, or 10 years)
When does this time start?

If you are talking about the deficiency on the note (the difference between what the house sold for at foreclosure vs. what the original debtor owed), it would start on the date that the debt was fixed, that is, the date of foreclosure. I am not a North Carolina lawyer, but it appears that your limitation period on a written contract is 3 years (from the date of the foreclosure they would have 3 years to initiate a lawsuit to collect on the deficiency).

If a judgment is received, how would it affect this family given the current income and assets?

If you are talking about the original debtor that had his house foreclosed on, a judgment against him would automatically be a judicial lien against any real property that he owns as of the date of the judgment. Also, depending on whether the state of NC allows garnishment of wages, that could also occur if the creditor chose to do so. Also, any judgment could be used to freeze his bank accounts and any non-exempt property under NC law could be executed upon (seized).

How long would a judgment be valid for?

It appears that judgments in North Carolina are good for 10 years from the date of judgment, but a judgment that becomes dormant after the 10 years can probably be revived fairly easily after the 10 year period expires.

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