Expert: Kathleen Eads - 7/29/2006

Question
Hi Kathleen,
My brother passed away about 7 months ago. He died poor without an estate. Twenty years ago he secured a loan for his business in FEB 1984. He used a rental house, his home and a life insurance policy as collateral. The loan defaulted  and by Nov 1984 he lost his rental property to the bank as partial settlement for the debt. They gave him a release on the lien on the rental house (after they foreclosed on the house) recognizing it as a partial payment for the debt. The assignment on his life insurance remained and a lien of his residence remained. The Bank went defunct in 1992 and the FDIC sold the debt held by the bank to a large company. We tried to get a release on the assignment on his life insurance. We tracked down the company, which took over the debt from the FDIC. This took a long time since the company closed some offices, etc. We finally found them and that triggered them to pursue the life insurance policy.

If we are lucky they may not have the supporting paperwork, but they will not give us any proof to show they can substantiate their claim. Of course, their lawyers are handling it now and why would their lawyers give us anything that could help our case? We will ask the FDIC to get the supporting docs from them.

The only hope, other than lost docs, is that some type of statue of limitations has run out on this thing, somehow.
Question: Any thoughts about statue of limitations on assignments of life insurance policies or this loan in general?
Thank you sincerely!  

Answer
Bob,

I am in no way, shape, or form a specialist on life insurance, but I DO know debt.  I have included a web site where you can check statute of limitations, based on the type of debt and geographical location.  Over 20 years ago has me thinking they don't have a leg to stand on.  

http://www.cardreport.com/laws/statute-of-limitations.html

I hope this helps!

Kathleen Crabtree-Eads