HELOC: Separate Statute of Limitations for Each Payment

  The Court of Appeal, in Piedmont Capital Management, etc., v. McElfish, confirms that a HELOC agreement that requires the borrower to make monthly payments and to pay the full amount by a specific date, which also grants the lender discretion whether to accelerate the loan due to a missed payment, does not contemplate that a breach as to a monthly payment is a breach as to the full amount absent acceleration.

  Suit on the agreement was, therefore, timely as to all missed monthly payments within the four years preceding its filing and timely as to all future payments because those payments were accelerated within that four-year “look back” period. [The statute of limitations for a breach of contract claim is four years per Code Civ. Proc., § 337.]

Promissory Note Statute of Limitations: 4 or 6 Years?

  What is the statute of limitations on a promissory note? The statute of limitations for an action upon any contract, obligation or liability founded upon an instrument in writing is four years from breach per Code of Civil Procedure section 337. However, Commercial Code section 3118(a) provides a six-year statute of limitations for “an action to enforce the obligation of a party to pay a note payable at a definite time.” The period runs from “the due date or dates stated in the note.” Continue reading