Accordingly, the statute of limitations period to collect the payment does not commence until the borrower misses the periodic payment. In reaching the decision, the state supreme court explained that in Colorado, a payment under a security agreement comes due on the date specified in the underlying contract - typically the promissory note and deed of trust. However, the Colorado Supreme Court reversed the appellate court’s decision, holding a bankruptcy discharge cannot trigger acceleration or the running of the statute of limitations for installment payments that have not come due. Because six years lapsed since the purported statute of limitations commencement date, the court of appeals determined the lender was barred from enforcing the debt in any manner. The state supreme court reviewed the court of appeals’ holding that Colorado’s six-year statute of limitations to enforce the borrower’s mortgage loan debt began running upon the borrower’s bankruptcy discharge in 2012. On April 24, the Colorado Supreme Court issued a highly anticipated decision, available here. Colorado just became the latest state to recognize that a borrower’s bankruptcy discharge does not accelerate secured installment debt or trigger the final statute of limitations period to recover the debt.
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