Zombies! Foreclosure Debt Lives
As CNNMoney puts it: “they thought losing their home was bad enough.” Yet many people who lost their homes in foreclosure during the recession are now facing significant collections efforts. Who are these people? Anyone who owed more than their home was worth when their home sold at the foreclosure auction, which amounts to many Americans.
Sometimes a state’s laws will influence whether a lender can collect and for how long after foreclosure the lender can collect. Each state is different. The article makes note that “in June 2013, Florida reduced the statute of limitations in which lenders could go after foreclosure debt from 5 years to 1 year.” This triggered the filing of several lawsuits in Florida to collect on funds still owed post foreclosure. Just when people were starting to feel like they were in the clear.
In this CNN article, it goes into further details on the realities of foreclosure debt and how different states, have different laws that really need to be navigated with the help of a foreclosure debt attorney.
Many people assume California does not allow for lenders to collect post-foreclosure. This is untrue. There are situations where a lender can legally sue to collect funds still owed post-foreclosure. They typically have a 4 year window from the date of the foreclosure sale to sue if they want to collect their funds. For these reasons, we recommend consult an attorney if you are hearing from a debt collector about a debt you thought was extinguished by foreclosure.
Author: Kevin Fallon McCarthy
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