Legal Question in Civil Litigation in California

Re: Statue of limitations for loans

There facts presented are insufficient to answer your question. But read the following to determine which facts you'll need to gather.

This is an action for breach of contract. The contract is either oral or written. In CA, the statute of limitations for an oral contract is 2 years, whereas it is 4 years for a written contract.

It's unclear from your question whether the "letter" is a contract. That's a question for an attorney who has read the letter, but let's assume for the moment that you have a contract.

The statute of limitations begins to run from the date of the first missed payment. Since you've got a contract in August 1999, and last payment in November 2002, it's not clear when the first missed payment occurred. Did the contract call for payments once per year? Or, did it require monthly payments? If it's yearly, then the first breach would be around august/november 2003 (since you received a payment the year before). That's an odd repayment period, and I think monthly payments is the more likely term. If so, the first breach must have been back in 2000. You see the difficulty we have answering your question without knowing when the first missed payment occurred.

At any rate, let's assume that you have a four-year statute that began to run with a first-missed-payment in December 2002. That would seem to expire in December 2006. However, those statutory limitations periods are tolled from the time the bankruptcy is filed until the stay is lifted. A "stay" is a court order that prevents you from filing a lawsuit, and there is a stay in every bankruptcy case. Thus, the limitations period is extended by however long the bankruptcy stay was in effect. Code of Civil Procedure section 356.

For illustration, assume that the bankruptcy stay lasted eight months. Your limitations period would be extended by 8 months. Again for illustration, if the first breach of contract occurred in December 2002, the time for filing a lawsuit would be August 2007.

To recap, you need to figure out:

1. Was there a written contract?

2. When was the first breach?

3. When was the bankruptcy filed?

4. When was the stay lifted?

Good luck!