Bank Listed As Payee on Life Policy Question

[SportsNut]

I suggested my client refer with a lawyer. thanks for the advice. Referring to NY state law, would anyone here know how long a bank can stay on as a collateral assignee on a bank loan that was unpaid 20 years ago and the bank was attached to a life insurance policy at the time of the loan, as a guarantor of payment incase the client didn't pay, which he didnt,

OK, so now we know that the debt is in NY state...

Now we need to know what type of debt this is; personal or business, secured or unsecured, revolving debt or mortgage debt... then your original question can be properly addressed. Each type of debt obligation has a different statute of limitations... so we need to know specifically what type, etc. Also pertinet is the last activity on the loan, meaning how long dormant without any attempt to collect or service the loan.?

You may not know the above answers but this is what is necessary to be able to adequately address this without merely rendering a guess... which is what has been entered here previously. (answers all over the place and some way off base).
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Chances are that this debt is no longer enforceable.

NY statute of limititation on collecting different types of debt is 20 yrs on some debts, 10 yrs on mtgs and 6 yrs on most other debt obligations. Meaning that if the issue or owner of the debt allows the debt servicing or collections to go dormant, without collection actions for that period of time, then the debt obligation is no longer enforceable or collectable.

Here is the language by statute:


New York Statutes of Limitation

N. Y. Civil Practice Law and Rules: Chapter Eight of the Consolidated Laws, Article 2 - Limitations of Time:​

211. Actions to be commenced within twenty years. (a) On a bond. (b) On a money judgment. (c) By state for real property. (d) By grantee of state for real property. (e) For support, alimony or maintenance.​

212. Actions to be commenced within ten years. (a) Possession necessary to recover real property. (b) Annulment of letters patent. (c) To redeem from a mortgage.​

213. Actions to be commenced within six years: where not otherwise provided for; on contract; on sealed instrument; on bond or note, and mortgage upon real property; by state based on misappropriation of public property; based on mistake; by corporation against director, officer or stockholder; based on fraud.​

 

[djs]

I don't think there is a statue of limitations on debt, just on how long the debt can be pursued. The fact it comes off the credit report does not mean the debt itself is discharged.

If he didn't repay the debt, he probably owes far more than the life policy is worth.

Are there any legal remedies? Yes, the bank can pursue the estate to full repayment of the original debt.

Bottom line: Chasing this may cause more problems than you want to get into. If its an unpaid debt, the bank will find it somewhere. Yes, it was probably written off a long time ago, but those records still exist somewhere.

Dan

 

[SportsNut]

I don't think there is a statue of limitations on debt, Dan

Dan:

You know quite a bit about ins... but you know nothing on the subject at hand here. EVERY State has a sol on debt.

The key element is, how long has it been since the creditor "serviced" the debt. Meaning managed the acct, attempted to collect, etc. If that exceeds the sol properly servicing the debt, then it is unenforceable... this means that it is uncollectable and the creditor cannot attempt to do so. Now if it was real estate a quiet title action might be required to clear the title, but it would be cleared, period. And you would likely be able to collect damages from the lender equal to the cost of the quiet title action for not releasing the mtg. Other unsecured debt is the equivilent of being discharged or paid in full.

Suggest you read the NY Statute above, as it relates to abandoned debt... if that does make sense to you then there is your answer. If it doesn't, then the credit and collection business is not your forte'. In that case stick to ins.

 

[ActingBoss]

I'm sorry your post just made me think of the Mortgage mills that created paperwork for mortgages that were phony.

Your angst is misplaced.

"Robosigning", the process you refer to, refers to "govies" and the affadavits that must be signed bearing individual witness.

The mortgages weren't phony........they were indeed made by reluctant banks because of Community REIT (look it up) to borrowers they knew or should have known could not or would not pay. The subprime industry flourished as an aside to the creative financing fueled by FHLMC, FNMA.....all of which developed as Congress sought political gain by making affordable housing a "right".........which it isn't.

In most people's desperate, maniacal struggle to achieve a socialist utopia, they forget who the victim is and who the perpetrator is.........in this case, the perpetrators are those countless millions who got in mortgages they couldnt afford, and the victims are our childred and grandchildren who have choice but to be saddled with debt for their entire lives.
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Dan:

You know quite a bit about ins... but you know nothing on the subject at hand here. EVERY State has a sol on debt.

The key element is, how long has it been since the creditor "serviced" the debt. Meaning managed the acct, attempted to collect, etc. If that exceeds the sol properly servicing the debt, then it is unenforceable... this means that it is uncollectable and the creditor cannot attempt to do so. Now if it was real estate a quiet title action might be required to clear the title, but it would be cleared, period. And you would likely be able to collect damages from the lender equal to the cost of the quiet title action for not releasing the mtg. Other unsecured debt is the equivilent of being discharged or paid in full.

Suggest you read the NY Statute above, as it relates to abandoned debt... if that does make sense to you then there is your answer. If it doesn't, then the credit and collection business is not your forte'. In that case stick to ins.

None of you have any idea of which you speak, particularly the *** above who says there's no "statue" (sic) of limitations on debt.....honestly, do you all have permits to be this stoopid?

 

[SportsNut]

Your angst is misplaced.

"Robosigning", the process you refer to, refers to "govies" and the affadavits that must be signed bearing individual witness.

The mortgages weren't phony........they were indeed made by reluctant banks because of Community REIT (look it up) to borrowers they knew or should have known could not or would not pay. The subprime industry flourished as an aside to the creative financing fueled by FHLMC, FNMA.....all of which developed as Congress sought political gain by making affordable housing a "right".........which it isn't.

In most people's desperate, maniacal struggle to achieve a socialist utopia, they forget who the victim is and who the perpetrator is.........in this case, the perpetrators are those countless millions who got in mortgages they couldnt afford, and the victims are our childred and grandchildren who have choice but to be saddled with debt for their entire lives.
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None of you have any idea of which you speak, particularly the *** above who says there's no "statue" (sic) of limitations on debt.....honestly, do you all have permits to be this stoopid?

First off, these affidavits signed by robosignors were not signed by "govies" as you call them. These signors were employees of the lenders who made the loans or were the assignee of the mtgs and notes. They were signing to attest to the fact that they did in fact own the debt obligation and did in fact have the rights to foreclose. A fact that later became under question, for good reason, and these signors, who signed like robots, not knowing even what they were really signing... hence the name "robosignors", didn;'t have the foggiest idea if the facts stated in the affidavits were accurate or not. Sort of defeated the entire purpose of the affidavit and made a mockery of the courts that the affidavits were filed in.

Define the term "Community REIT", as referred to in your post. I think what you mean to say here is... the "Community Reinvestment Act of 1977" also referred to CRA. More on the CRA can found here.

REIT = Real Estate Investment Trust.

Lets see what you know, since have denounced knowledge by all others. Your subject knowledge is already under question here, since you stated that robosignors were "govies", which they are most deifintely NOT.

The above is straying quite a distance from the original question, as this really has nothing to do with statute of limitations on collecting debts... but forgive me, lets here you answers AB...

 

[djs]

Dan:

You know quite a bit about ins... but you know nothing on the subject at hand here. EVERY State has a sol on debt.

The key element is, how long has it been since the creditor "serviced" the debt. Meaning managed the acct, attempted to collect, etc. If that exceeds the sol properly servicing the debt, then it is unenforceable... this means that it is uncollectable and the creditor cannot attempt to do so. Now if it was real estate a quiet title action might be required to clear the title, but it would be cleared, period. And you would likely be able to collect damages from the lender equal to the cost of the quiet title action for not releasing the mtg. Other unsecured debt is the equivilent of being discharged or paid in full.

Suggest you read the NY Statute above, as it relates to abandoned debt... if that does make sense to you then there is your answer. If it doesn't, then the credit and collection business is not your forte'. In that case stick to ins.

Fortunately, I can say that debt collection is definitely not my strong point. Never want it to be.

I do understand that there is a statue of limitations on debt collection. Never doubted that. This is a little different though, the bank has an asset (the life policy) and the OP's client is asking the bank to waive that asset. That asset is against a debt. I'm not sure how this works.

In this case, the bank doesn't have to enforce the debt (which, as I understand CA law, is all the statue of limitations applies to, not the debt itself), they just have to collect it from the life insurance company, against an asset that they basically already have. New York may be different, probably is. The statues postes seem to read similar to CA though, were it simply limits 'actions' (enforcement) and not the expunging of the debt itself.

Its a small nuance in a lot of ways. In general terms, an unenforceable debt can be seen as no debt, but legally, there may be a subtle difference that might apply in this case.

With this, I'll crawl back under my rock and go back to something I know a little bit more about, insurance!!!! To me, this is something a person with a piece of paper on the wall is going to have to sort out, if there is enough money involved to make it worthwhile.

Dan

 

[SportsNut]

Fortunately, I can say that debt collection is definitely not my strong point. Never want it to be.

I do understand that there is a statue of limitations on debt collection. Never doubted that. This is a little different though, the bank has an asset (the life policy) and the OP's client is asking the bank to waive that asset. That asset is against a debt. I'm not sure how this works.

In this case, the bank doesn't have to enforce the debt (which, as I understand CA law, is all the statue of limitations applies to, not the debt itself), they just have to collect it from the life insurance company, against an asset that they basically already have. New York may be different, probably is. The statues postes seem to read similar to CA though, were it simply limits 'actions' (enforcement) and not the expunging of the debt itself.

Its a small nuance in a lot of ways. In general terms, an unenforceable debt can be seen as no debt, but legally, there may be a subtle difference that might apply in this case.

With this, I'll crawl back under my rock and go back to something I know a little bit more about, insurance!!!! To me, this is something a person with a piece of paper on the wall is going to have to sort out, if there is enough money involved to make it worthwhile.

Dan

This is the important distinction in this case. If the SOL has been reached on the debt, the creditor is forbidden from collecting the funds... whether that be from the debtor or any collateral that they have been holding against the debt.

Lets use another example to illustrate this. Say that the debt was mtg debt, and the SOL has been exhausted... if what you state was how it really worked then the lender would still be able to foreclose on the collateral. What the law states is that they are EXPRESSLY forbidden from doing so.

Now insert the life policy as collateral... the lender has no right to continue to encumber the proceeds of the policy. You are correct, it may take an Atty to get the lender to acquiesse, which would be an unfortunate and unneccessary event for the estate in this case, but the lender will have 0 legal claim to the proceeds of the life policy; period.

I know more than a little bit about creditor / debtor relations because I have enforced collection agreements in real estate for over 20 yrs; foreclosures, judgments, etc. This is an area of specialty as it relates to the legal process involved. While I am NO lawyer, I have handled many cases in the courts pro se and with counsel, having opposed many a legal counsel representing the debtor, and my track record of success is pristene... so I know the territory on this discussion. Of course the law changes from state to state, but I am conversent with the subject matter and can interpret the statutes on same.

 

[djs]

But who currently 'owns' the policy?
If the bank is listed only as a beneficiary, then what you are saying makes sense to me. If the bank is the actual owner of the policy, then it is different. It is the banks asset, not just them as lienholder, as is the case with a mortgage.

Yes, I'm far, far removed from my area of expertise. I NEVER want to be an expert in debt collection. My guess in this is the bank won't pursue it since the new bank probably can't find anything where they are the owner of the original debt anyway (one of the banks would have written this off a long, long time ago). At the same time, if they can't find the debt, they won't sign a release of the debt, which puts the OP's client back in the same position of being unable to collect the proceeds.

If they do find the debt, if its large enough for them to pursue, they have a lot of lawyers who can work on this and make a case, if they want to.

Dan


P.S. I have been involved in enough legal cases (mostly intellectual property stuff) to know what appears to be black and white usually isn't, if there is any sort of twist to the plot. This has a twist, I just don't know how much of a twist.

 

[ActingBoss]

First off, these affidavits signed by robosignors were not signed by "govies" as you call them. These signors were employees of the lenders who made the loans or were the assignee of the mtgs and notes. They were signing to attest to the fact that they did in fact own the debt obligation and did in fact have the rights to foreclose. A fact that later became under question, for good reason, and these signors, who signed like robots, not knowing even what they were really signing... hence the name "robosignors", didn;'t have the foggiest idea if the facts stated in the affidavits were accurate or not. Sort of defeated the entire purpose of the affidavit and made a mockery of the courts that the affidavits were filed in.

Define the term "Community REIT", as referred to in your post. I think what you mean to say here is... the "Community Reinvestment Act of 1977" also referred to CRA. More on the CRA can found here.

REIT = Real Estate Investment Trust.

Lets see what you know, since have denounced knowledge by all others. Your subject knowledge is already under question here, since you stated that robosignors were "govies", which they are most deifintely NOT.

The above is straying quite a distance from the original question, as this really has nothing to do with statute of limitations on collecting debts... but forgive me, lets here you answers AB...

You're an ***........you don't know what the term "govies" means.........you are not qualified to be in the discussion.

 

[SportsNut]

You're an ***........you don't know what the term "govies" means.........you are not qualified to be in the discussion.

You're a hostile sort... Folks that tend to act and express themselves as you do, tend to have inferiority issues.

So mr smartazz, why don't you actually answer the question and define the term GOVIE; if you know. You may not, because you certainly do not understand what you think you do on the subject matter.

You remind me of someone who listened intently to a story of details at the water cooler, then repeated the story because then you thought you knew something... only to mangle the details terribly... as you have with the Community REIT... LMAO. Define Community REIT, if you will...? You can't, because you are all screwed up on your facts here Boss_man...

Now instead of attempting to insult someone, why don't you attempt at explaining yourself here... this will be good.

You might also check the Urban dictionary on the term Govie, before you embarass your azz some more. Oh wait, it defines Govie as:
"One who works for the government, as opposed to a contractor working for a private company".... duh, why didn't I think of that.