I'm curious to hear why you believe the lending agreement with Earnest is anything but a promissory note.

A promissory note is generally defined as:

1. An unconditional promise in writing that is
2. made by a borrower to a lender,
3. to pay a certain/specified amount of money
4. on demand or at a fixed or determinable future time, so long as that written promise is
5. signed by the borrower.

If the lending agreement meets the definition of a promissory note, it's a promissory note.

Also, make sure you're using the correct SOL before doing a victory lap.

Which SOL Applies?

States establish a SOL on promissory notes, but not all states have the same SOL for all promissory notes.

For example, New York famously shortened its SOL for the collection of consumer debts to 3 years (it had previously been 6 years). However, student loans are excluded from the definition of consumer debt.

22 NYCRR 208.14-a(a)(1), 22 NYCRR 212.14-a(a)(1), and 22 NYCRR 210.14-a(a)(1) each provide that, "A consumer credit transaction does not include debt incurred in connection with, among others, medical services, student loans, auto loans or retail installment contracts."

In California, the statute of limitations on the collection of a defaulted promissory note is four (4) years. However, California Commercial Code 3118(a) states that, "an action to enforce the obligation of a party to pay a note payable at a definite time shall be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date."

Which State's SOL Does Your State Apply?

Some states treat the SOL as a procedural matter, meaning that its expiration doesn't erase the debt but only limits the court's power to provide a remedy. In states taking this procedural view, the court will apply its own state's SOL regardless of the governing law in the promissory note.

Other states view the SOL as substantive. In those states, the court will apply the SOL of the state with the most significant relationship to the dispute. This typically means the court will apply the laws of the state chosen in the promissory note.

Beyond that, some states apply a borrowing statute. This allows the state to look at its own SOL and the one in the choice-of-law provision of the promissory note, applying the one that's most advantageous to its own citizens.

Under a borrowing statute, the court performs a two-step comparison. If a cause of action (like a breach of contract) occurred in State B, but the lawsuit is filed in State A, the court in State A will check:

1. The Forum’s Clock: Is the case timely under State A's laws?
2. The "Foreign" Clock: Is the case timely under the laws of State B (where the debt originated or where the contract says the law applies)?

If the answer to either is "No," the case is dismissed. The court "borrows" the shorter period to ensure the creditor doesn't get a second bite at the apple in a more "permissive" state.