By now, most servicers are fully familiar with New York’s Statute of Limitations and the nuance that it only begins to run on each installment when it becomes due unless accelerated. (See my article about the Statute of Limitations).
Oftentimes, a Debtor files a Bankruptcy petition that will stay a pending foreclosure. Should the Debtor seek relief under Chapter 7, all property of the Debtor becomes property of the Bankruptcy Estate and subject to disposition by the Chapter 7 Trustee, with court approval. Should the Chapter 7 Trustee determine that there is no equity in the mortgaged premises, he/she will “abandon” the property, and title will then revert back to the Debtor. The Debtor must then either pay the secured debt, or “surrender” the property to the Secured Creditor in satisfaction of, at least, the secured portion of the debt.
Prior to the establishment of the United States, people in England who did not pay their debts were sent to debtor's prison. Today, in the United States, there is no debtor’s prison and creditors can only enforce judgments if they can locate the assets of the judgement debtor, and have them sold to liquidate the debt or by garnishing their wages. If a debtor truly has no job or assets, he is said to be “judgement proof” because a judgment creditor has nothing to sell or garnish. Many debtors, however, merely pretend to be judgement proof! They really do have assets, but attempt to hide them.
On December 3, 2015, the United States Court of Appeals, 11th Circuit, decided the case of Kevin Prescott v. Seterus, Inc., 635 Fed. Appx. 640, 2015 U.S. App. LEXIS 20934 (11th Cir. Fla. 2015) and held that the inclusion of estimates or anticipated costs that have not yet been incurred, in a payoff or reinstatement letter, is a violation of the FDCPA.