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New Jersey:I filed for chapter 13 (April 2005) and a few months later was involved in a personal injury lawsuit. I completed my 5 year plan and the judge also put the condition that i had to give my settlement over to them when the case was over. The case was settled on Nov 2008 for $475,000 and of course my part was the left over about $180,000. I cancelled my mortgage about $90,000 and kept the rest at the bank. I recieve a letter Jan 2011 stating that since i failed to notify that my injury case was settled and failed to give them the settlement that the judge would motion to dismiss my ch 13 case. On April 2011 the case was officially dismissed and the creditors started to call around late summer 2011. We settled a few only 40% of what was owed but my question is about the statue of limitations and if it can help me. Also if it can then did i make a mistake in settling the prior accounts? Thank you
Optional Information: State/Country relating to question: New Jersey Already Tried: Advice from my bankruptcy lawyer.
Hi - my name is XXXXX XXXXX X'X a Bankruptcy litigation attorney here to assist you.
The Statute of Limitations on open accounts (credit card accounts) and contracts is 6 years under New Jersey Code §2A:14-1. However bankruptcy tolls the applicable statute of limitaitons because 11 USC 362 ("automatic stay") prohibits creditors from pursuing a debtor while in bankruptcy.
This is set out in 11 USC § 108(c), which is a tolling provision; it extends state statutes of limitations for creditors who are barred by the automatic stay from taking timely action against the debtor. See Young v. United States (In re Young), 233 F.3d 56, 59 n.3 (1st Cir. 2000).
Thus, the time you were in bankruptcy doesn't count against the statute of limitations applicable to the creditor's right to pursue the debt. Thus, there would have to be 6 years from the last payment or charge on the account - less the years you were in bankruptcy - in order for the debt to be barred.
It provides in pertinent part:
If applicable nonbankruptcy law . . . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor, . . . and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of -(1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay under section 362 . . . of this title . . . with respect to such claim.
Please let me know if you have any additional questions.
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HiI'm just following up to see if you have any additional questions related to this issue. If so, please let me know. Thanks,Kirk