Oct. 18, 2016 — Maurice Wutscher attorneys Donald Maurice and Keith Wier discuss out-of-statute debt and recent circuit court decisions regarding the Fair Debt Collection Practices Act and the Bankruptcy Code in two articles for the fall issue of DBA Magazine.
In “Addressing the Sweeping Expanse of Out-of-Stat Debt,” Mr. Maurice and Mr. Wier offer guidance for debt buyers when dealing with time-barred debt.
“The question of the applicable limitations period is mostly specific to the facts and circumstances of each account. A company’s efforts to consider potential factors determinate of the applicable limitations period should be seen as a defensive measure to any claim arising from the failure to provide disclosures or even the filing of a lawsuit. Recent decisions appear to support the view that when a company makes a good faith effort to determine the applicable limitations period and when more than one limitations period could be deemed to apply, the error may not warrant FDCPA liability,” they write.
In “Proofs of Claim for ‘Time-Barred Debt’ Do Not Violate FDCPA, Majority of Courts of Appeals Now Rule,” Mr. Maurice writes, “As you may recall, in Crawford v. LVNV Funding LLC, the Eleventh Circuit held that a debt collector violates the federal Fair Debt Collection Practices Act (FDCPA) when it files a proof of claim in a bankruptcy case on a debt that it knows to be time-barred. More recently, in Johnson v. Midland Funding LLC, the Eleventh Circuit held that there is no irreconcilable conflict between the FDCPA and the Bankruptcy Code. The Crawford opinion launched a flood of litigation and, for the most part, the rationale of Crawford has been rejected by a majority of the trial and bankruptcy courts outside the Eleventh Circuit.”
“The growing split between the Eleventh Circuit and other Courts of Appeals increases the likelihood that this issue is headed to the U.S. Supreme Court,” Mr. Maurice predicted when writing the article in August. On Oct. 11, the Supreme Court decided it will review the decision of the U.S. Court of Appeals for the Eleventh Circuit in Johnson v. Midland Funding LLC.
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