- A derogatory can appear on a credit report for 7 years.
- Statutes of limitations conflict questions are fact dependent.
- Consult with an attorney to learn which statute of limitations applies to you.
BILL'S ANSWER
How long a derogatory entry on your credit report can appear is separate and independent from state laws that control how and if a creditor can collect a debt.
Statute of Limitations questions are difficult to answer because they are very fact dependent, and readers rarely include all relevant facts in their questions. Complicating your issue is the foreclosure on your California second deed of trust, which may be subject to California's anti-deficiency rules.
Assuming for the sake of argument that California's anti-deficiency rule does not apply to your second, the creditor has a right to collect the deficiency balance. However, as you suggested, which statute of limitations applies to you as a Kentucky resident? Let us also assume the creditor sues you in a Kentucky court. The creditor will argue that a Kentucky court should use the Kentucky statute of limitations found in Kentucky 413.090 because you the defendant are a Kentucky resident in a Kentucky venue. Your attorney would argue that the California statute of limitations would apply because the foreclosure occurred in California on a California property when you were a California resident, and that it is reasonable for all parties to expect to use California's rules because you would be penalized for moving to a state with different civil procedure rules.
My guess, note that word choice, is a Kentucky court would decide in your favor and use the California statute of limitations. However, I hasten to encourage you to consult with a Kentucky attorney who has experience in civil litigation. He or she will be able to review your facts in detail and apply Kentucky case law. See also the Bills.com resource How to Tell Which Statute of Limitations Applies to Your Situation.
The creditor may never take you to court. In most states, a creditor can continue to pursue collections on debt that is beyond the statute of limitations. In these situations, send the creditor a cease communications letter to stop telephone collection calls.
I hope this information helps you Find. Learn & Save.
Best,
Bill
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