Legal professionals should be aware of the latest ruling by the Washington State Supreme Court regarding foreclosure and bankruptcy, which might affect how they handle similar cases in the future. According to JD Supra, the court has made a significant ruling in two separate cases on when the statute of limitations begins to run in a foreclosure under a deed of trust in Washington.
In the first case, a couple had taken out five Home Equity Lines of Credit (HELOCs) from a bank, secured by four different properties. They ceased making installment payments before and after filing for Chapter 7 Bankruptcy in 2012, and their discharge in 2013. Following this, the recent ruling by the Washington State Supreme Court provides some clarity on when the foreclosure clock is started.
The court ruled that the act of filing for bankruptcy does not trigger the statute of limitations on foreclosure. This implies that despite the couple’s bankruptcy status, the clock on foreclosure did not start ticking until the lender invoked their power of sale under the deed of trust. This effectively overruled the view that the limitation period began when the couple declared bankruptcy in 2012.
This legal precedent could carry significant weight in future dealings with bankruptcy and foreclosure. It may affect both the tactics and strategy of legal teams in both preventative measures and in court proceedings. It also leaves room for interpretation with regard to the precise moment when the foreclosure clock begins to tick, which might lead to further rulings and clarifications in the future.