The short answer is that with installment loans, the statute of limitations begins to accrue on each installment as it comes due. Once the payments are accelerated, then the statute begins to run on the balance of the debt.
If the loan is on real estate, however, then the limitations period does not begin to run until the “maturity date of the last note, obligation, or installment.” Tex. Civ. Prac. & Rem. Code § 16.035(e). Section 16.035(e), however, does not apply when the note has been accelerated. See Hammann v. H.J. McMullen & Co., 122 Tex. 476, 62 S.W.2d 59, 61 (1933); Burney v. Citigroup Global Markets Realty Corp., 244 S.W.3d 900, 903–904 (Tex. App.—Dallas 2007, no pet.).
In Texas, “‘A cause of action accrues when an installment is due and unpaid.’ See Gabriel v. Alhabbal, 618 S.W.2d 894, 897 (Tex. Civ. App. — Houston [1st Dist.] 1981, writ ref’d n.r.e.); Goldfield v. Kassoff, 470 S.W.2d 216, 217 (Tex. Civ. App. — Houston [14th Dist.] 1971, no writ).” Stille v. Colborn, 740 S.W.2d 42, 44 (Tex. App. San Antonio 1987). The balance of a loan becomes due and unpaid upon acceleration. Id.
If the loan is for real estate, then the statute of limitations is four years and special provisions apply. Tex. Civ. Prac. & Rem. Code § 16.035. For example, “A sale of real property under a power of sale in a mortgage or deed of trust that creates a real property lien must be made not later than four years after the day the cause of action accrues.” Id. § 16.035(b).
Disclaimer: This blog is for informational purposes only. Do not rely on any part of this blog as legal advice. Instead, seek out the advice of a licensed attorney. Also, this information may be out-of-date.