Legal Question in Credit and Debt Law in Pennsylvania

The borrower lives in PA while the cosigner lives in NY. The loan was never paid on since default. If the sol has run out for the borrower but not the cosigner can sol be used as a defense if they sue? Or do they only sue in the state where the loan originated not the state where the respective parties reside ? Since both parties lived in different states how is the originating state decided? Would it be pa or ny?

Asked on 1/05/17, 4:41 am

1 Answer from Attorneys

Statute of limitations is 4 years in PA and 6 in NY. The statute of limitations would just apply if the creditor sued the borrower in PA. The creditor can sue the co-signer in NY. And if an action is brought in NY, it is possible for the co-signer to join the borrower as a party defendant in the NY action, assuming it would be proper for NY to exercise jurisdiction over the borrower. The rest of your question sounds like a law school exam.

There are lots of rules for deciding where cases are brought. You first have to decide which states have jurisdiction. There is ALWAYS jurisdiction where at least ONE of the parties resides. You do not indicate the state where the contract was made. That could also be a place for suit to be brought. Some contracts also have forum selection clauses which dictate where a claim has to be brought. So there is no way to answer your question without seeing the documents and knowing the facts.

And you think the statute of limitations has expired against you. Maybe it has not even begun to run. Have you considered that? The statute begins to run when an action could be maintained. Some loans are payable on demand. What this means is the creditor has to first make a written demand for payment to start the statute of limitations running. Has the creditor done that?

All of this aside, the fact is that you have not been sued for 4 years, suggesting this is some kind of personal loan. If the creditor is not forcing the issue, then you and the co-signer should just lay low for another 2 years and hope this all goes away.

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Answered on 1/05/17, 9:29 am

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