I had a Wachovia business line of credit, when does statute of limitations run out in TX for such contract and from what date?

Asked over 1 year ago - Houston, TX

I had an LLC, I obtained a Line of Credit through Wachovia. The last payment I was able to make was March/2008. The bank charged off the account on 10/08. When does the statute of limitations run out for this contract? Does the count down start in March or in October? Also is that statute of limitations for this type of loan 4 or 6 years? A lawyer is threatening to sue me for over 50K unless I can come up with some kind of payment plan. Should I rely on the SOL of limitations?
Thank you

Attorney answers (2)

  1. John R. Bonica

    Pro

    Contributor Level 13

    1

    Lawyer agrees

    Answered . Mr. Ivy's response that "the statute of limitations for a breach of contract is four years from when the cause of action arises" is correct. However, without reviewing your documents, it is not possible to say when cause of action arises. For example, even if you defaulted on a payment in March 2008, if you were required under your loan documents to make subsequent payments in March 2009 and March 2010 (and further assuming that the entire debt was not accelerated after the first default), then limitations would have run on the March 2008 installment but not on the March 2009 or March 2010 installments. Further, the general rule that a claim accrues and limitations begins to run on each installment when it becomes due is modified by a Texas statute that provides that if a note payable in installments is secured by a lien on real property, limitations does not begin to run until the maturity date of the last installment. "If a series of notes or obligations or a note or obligation payable in installments is secured by a real property lien, the four-year limitations period does not begin to run until the maturity date of the last note, obligation, or installment. " Tex. Civ. Prac. & Rem. Code Ann. ยง 16.035(e)

    Legal disclaimer: John Bonica is licensed to practice law only in Texas. His response is not legal advice and... more
  2. Brent Barnes Ivy

    Contributor Level 9

    Answered . Generally, a loan is a type of contract. The statute of limitations for a breach of contract is four years from when the cause of action arises--usually when a borrower defaults. From the facts you provided, it sounds like you defaulted in March or October 2008 (what constitutes a default will likely be described in the terms of the agreement). In either case, the statute of limitations likely expired in March or October 2012. If you have not been sued yet, it is likely you will have a valid affirmative defense for statute of limitations. This cannot prevent you from being sued, but it is a deterrent. Also, if an attorney is trying to collect a debt from you, they must follow certain procedures under the Texas and federal Debt Collection Practices Acts. You may have rights that have been affected by unfair debt collection practices. I suggest you contact an attorney in your area who has experience in consumer-debtor law to review your options. Good luck!

    This answer does not create an attorney-client relationship for purposes of representation, privileged... more

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