[WSBARP] Length S/L on real prop secured debt is tolled by stay?
PrestonFoskey
preston at plfps.comcastbiz.net
Wed Mar 12 16:42:07 PDT 2014
I think the statute of limitations was tolled while the property was in
the hands of the Trustee. Likely for the entire time until Trustee gave
up on trying to sell and it reverted to the control of the Debtor.
Preston L. Foskey, Attorney at Law
WSBA # 12509
Preston L. Foskey, P. S.
8248 East D Street
Tacoma, Washington 98404-1042
Phone: 253.535.5829 Fax: 253.535.9391
E-Mail: preston at plfps.comcastbiz.net
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From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Wednesday, March 12, 2014 4:28 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] Length S/L on real prop secured debt is tolled by
stay?
Thanks! So the debt is clearly discharged, as of Day 97, but the Trustee
held onto the property for a couple of years and tried to sell it under an
order that said he could only do it with permission from the 1st and 2nd
DOT holders. (It was going to be a short sale.) Apparently they never
successfully negotiated a sale, because the Trustee eventually gave up and
gave the property back to the Debtor, then terminated the bankruptcy as a
no-asset no-distribution Ch. 7.
So, Debtor is still subject to foreclosure--but it's been over 6 years
since the last time he made a payment on the 2nd loan. So under ordinary
statute of limitations rules and RCW 7.28.300
<http://apps.leg.wa.gov/rcw/default.aspx?cite=7.28.300> , I could file a
quiet title and remove the 2nd DOT as an expired security interest.
BUT I'm concerned that the 6-year S/L was tolled while the property was in
the bankruptcy. But was it tolled only until discharge (97 days), or until
the case terminated (922 days)?
Thanks again for your collegial assistance!
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of PrestonFoskey
Sent: Wednesday, March 12, 2014 4:21 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] Length S/L on real prop secured debt is tolled by
stay?
Mr. Nelson:
Depends of the type of loan. If it is a mortgage the
Debtor may reaffirm if payments are current. If in foreclosure the
secured party will often bring a motion in the bankruptcy for relief from
stay to proceed with the foreclosure. The debt is discharged in
bankruptcy the creditor only has a right to the secured property.
If the secured loan is other than a mortgage it can
sometimes be avoided or if there is no equity in the property may be
essentially converted to an unsecured debt and discharged.
In any event if the creditor is listed in the bankruptcy
there is no longer any liability to pay the debt the creditor would only
have a right to foreclose on the real property.
Preston L. Foskey, Attorney at Law
WSBA # 12509
Preston L. Foskey, P. S.
8248 East D Street
Tacoma, Washington 98404-1042
Phone: 253.535.5829 Fax: 253.535.9391
E-Mail: preston at plfps.comcastbiz.net
WARNING: This email (including any attachments) is covered by the
Electronic Communications Privacy Act (EPCA), 18 U.S.C., Sec. 2510 - 2522,
is confidential and privileged. This email is solely for the use of the
addressee(s) named above. Receipt by anyone other than the individual
recipient is NOT a waiver of attorney-client privilege. Any violation of
the ECPA is subject to the penalties stated therein.
SPECIAL NOTICE TO CLIENT(S): If you are my client this email is directed
to you, DO NOT FORWARD to any other party, or you could be waiving the
attorney-client privilege.
Notice: The information contained in this e-mail is confidential and may
also be attorney-client privileged. This information is intented only for
the use of the individual or entity to whom it is addressed. If you are
not the intended recipient, or the employee or agent responsible to
deliver it to the intended recipient, you are hereby notified that any
use, dissemination, distribution,or copying of this communication is
strictly prohibited. If you have received this e-mail in error, pleasee
immediately notify me by replying to this e-mail and deleted the original.
Thank you.
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Wednesday, March 12, 2014 4:11 PM
To: wsbarp at lists.wsbarppt.com
Subject: RE: [WSBARP] Length S/L on real prop secured debt is tolled by
stay?
Counselors, I know this is an obscure one for most of us dirt lawyers--but
anyone have a thought on how long a bankruptcy stay tolls the S/L on
collecting a debt secured by real property? Or is there a kindly
bankruptcy lawyer who would take pity on me?
Many thanks--
Sincerely,
Eric
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
From: wsbarp-owner at lists.wsbarppt.com
[mailto:wsbarp-owner at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Tuesday, March 11, 2014 8:52 PM
To: WSBA Real Property listserve (wsbarp at lists.wsbarppt.com)
Subject: [WSBARP] Length S/L on real prop secured debt is tolled by stay?
I don't practice bankruptcy, and I'm having a difficult time on what I
think are two pretty basic questions for anyone who does.
How long is a statute of limitations tolled by the Sec. 362 automatic
stay, where the debt in question is a loan secured by a Deed of Trust on
real property?
More than 6 years have passed since client last made a payment on the
debt, so S/L is passed by strict calendar date.
But, client was in a Ch. 7 bankruptcy. It was filed on "Day 1", debtor was
discharged on Day 97, and the case was closed and trustee discharged on
Day 922. The entire bankruptcy proceeding occurred before the strict S/L
expiration.
RCW 4.16.230 says the S/L is tolled by a "statutory prohibition" on
commencing an action. But I find no case law confirming that the Sec. 362
stay is included. Is that just so basic that nobody bothers to contest it
or cite it in state court?
Also, Sec. 108(c) says that the S/L expires at the later of (a) normal S/L
plus tolling period, or (b) 30 days after notice of termination of the
stay under Sec. 362.
When did the stay terminate here? For most debts, it appears the stay
terminates at discharge of the debtor, Sec. 362(c)(2)(C) (here, Day 97).
But this particular creditor is secured and foreclosure was stayed--so
does that mean it's instead "the stay of an act against property" under
Sec. 362(c)(1), which means the stay lasts until "such property is no
longer property of the estate"? Which in this case is, I think, when the
trustee was discharged (Day 922), because the trustee had been making some
attempts to sell the real property, but finally gave up and closed the
case.
Any help, citations, pointers to places I can do more research would be
appreciated. Thanks!
Sincerely,
Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA 98101-2837
phone 206-625-0092
fax 206-625-9040
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