Information on 2nd Mortgage Foreclosure - The Bills.com Blog

debt. In most states, you are liable for the remaining balance owed on your second mortgage, and the mortgage company can attempt to collect the debt just like any creditor to whom you owe an outstanding unsecured debt, including referring the account to a collection agency or filing a lawsuit against you to obtain a judgment for the balance of the debt.

Considering the age of this debt, it is possible that the statute of limitations for pursuing legal action against you to collect this debt has expired. All states have a body of statutes in their codes of law called, ?Limitations of Actions,? commonly referred to as the statutes of limitations. The idea behind these laws is that we as a society have decided that we do not want old debts hanging around forever?we want people and businesses to be able to move on with their lives without worrying about being sued. The length of time a creditor has to sue you depends on your state of residence and the type of debt. For example, many states allow longer for creditors to file suit to collect on closed ended consumer loans than on credit card debts. Most states give creditors 5 to 10 years to file suit after default on written contracts, which this mortgage would probably be considered. Check out http://www.bcsalliance.com/y_debt_sol.html for more information about statutes of limitations and a list of limitations by state.

If a creditor files a lawsuit after the allowed time, the court will usually throw the case out and not allow the creditor to file suit again (called dismissed with prejudice). However, you must raise the issue of expired statute of limitations in a written response to the lawsuit, else the court will not know that the statute

of limitations has expired.
Since this creditor has not taken any legal action against you, and since the account is not appearing on your credit report, you may simply want to mail the collection agency that is contacting you a cease communication demand letter, commonly called a cease and desist letter, which should stop the collectors from contacting you further.

A federal law called the Fair Debt Collections Practices Act requires that debt collectors stop calling consumers if they are notified in writing by the consumer to stop calling. Since this debt seems to be having no detrimental impact on your credit rating or everyday finances, if you can stop the harassing phone calls, you may want to stop worrying about this old account and let it be forever a part of your past. A sample cease and desist letter can be found at http://fairdebtfaircredit.com/Dispute-Letters-example.pdf

However, if you do not feel comfortable with simply sending a cease and desist letter and forgetting about the debt, you may be able to contact the creditor to negotiate a repayment arrangement with the creditor. In my opinion, putting this debt behind you is probably the best court of action. As you mention in your question, the statute of limitations has likely expired on this account, so the telephone calls you are currently receiving are probably a last ditch effort to collect on the debt which will likely stop when you send a cease and desist letter.

I wish you the best of luck in resolving the problems you are experiencing with this account, and hope that the information I have provided helps you Find. Learn. Save.

Best,
Bill
www.bills.com

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