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  • Robert Weed

Like Many People in Herndon, Lonnie Had a Clearance

CitiFinancial foreclosed on Lonnie’s house back in 2017, but that debt had disappeared off his credit. Now it was back. An outfit called Dyck-O'Neal claimed they now owned that debt. They wanted $173,000. They hit his credit report and starting blowing up his phone.

Lonnie's security clearance officer wanted an explanation, right away.

Usually filing Chapter 7 bankruptcy will solve the clearance problem. But Lonnie couldn't file Chapter 7. His mom had died; his sister was living in the family house, now, but Lonnie owned a share. If he filed Chapter 7 bankruptcy, his sister would lose her home.

We put Lonnie in a Chapter 13 payment plan—because he owned that house with his sister, he had to pay his debts. But there was no way he could pay $173,000.

Lonnie caught a break. Dyck-O'Neal had waited too long and was tripped up by the statute of limitations. It had been just over five years after CitiFinancial accelerated the debt (starting the foreclosure process). After five years, under the Virginia statute of limitations, Dyck-O'Neal was too late.

The bankruptcy judge agreed with us, and knocked out Dyck-O'Neal's claim. Now Lonnie is in a payment plan he's able to do. His clearance, and the family home place, are safe.

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