Statute of limitations on collection of SBA loan on failed business

Asked over 1 year ago - San Diego, CA

My business failed in 2008 and my SBA loan went into default. I have made no payments since 2008, they have not made any collection efforts. When I got the loan, they took a "third position" on my house. Now I want to sell my house. Has the statute of limitations run out on collection of the loan??? How can I get the loan off my title??


Attorney answers (3)

  1. Carl H Starrett II

    Contributor Level 16


    Lawyers agree

    Answered . The statute of limitation applies to the SBA's legal right to sue and get judgment on the unpaid loan. The lien remain on your house and they have the right to enforce the lien. The SBA can foreclose or negotiate a payment through escrow.

    First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy.... more
  2. Michael Raymond Daymude


    Contributor Level 20


    Lawyers agree

    Answered . Your loan is secured by your interest in the house. It is unlikely the statute of limitations has run out on an amortized home loan especially without any collection efforts. In any event, it will not prevent the lender from recovering the full amount due on the note upon sale of the property. In short, you cannot "get the loan off title."

    I am licensed in California only and my answers on Avvo assume California law. Answers provided by me are for... more
  3. Robin Mashal

    Contributor Level 19


    Lawyers agree

    Answered . Disclaimer: The materials provided below are informational and should not be relied upon as legal advice.

    In order to remove the SBA's deed of trust (TD) from your property's title, you need to prove you have paid it off. The statute of limitations to sue on a breach of a written contract in California is within four years after the date of the breach. However, as my colleagues properly point out, the running of this statute of limitation does not invalidate the TD lien, nor does is affect the TD holder's power of sale. Take a look at Section 882.020 of the California Code of Civil Procedure at the link below. Be sure to consult your own attorney to protect your legal rights.

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