11th Circuit Court of Appeals
Id. at p. 13. “Just as LVNV would have
violated the FDCPA by filing a lawsuit
on stale claims in state court, LVNV
violated the FDCPA by filing a stale
claim in bankruptcy court.” Id. at p. 14.
A quick review of the documents filed
in support of the debt buyer’s proof of
claim will often tell you whether it is in
violation of the FDCPA. Simply look
for the date of last payment or the last
transaction date and compare it to
your state’s statute of limitations for a
written contract or open-ended account
(whichever would apply). Your client’s
billing statements and payment records
might provide further evidence. If the
debt is old enough that a collection
suit would be barred, then according to
Crawford, the debt buyer is in violation
of the FDCPA.
This could entitle your client to
recover actual damages suffered,
plus statutory damages of up to up
to $1,000 – pursuant to 15 U.S.C.
§1692k(a)(2)(A) – which could then be
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used to reduce the debtor’s obligations
under the Chapter 13 plan. In addition,
reasonable attorney’s fees can be
recovered from the debt buyer, just
as in any other successful action to
enforce liability under the FDCPA. See
15 U.S.C. §1692k(a)(3).
It is worth noting that this ruling only
applies to debt buyers. Original
creditors collecting their own debts
are unfortunately exempted from the
FDCPA. “The term ‘debt collector’…
does not include… any officer or
employee of a creditor while, in the
name of the creditor, collecting debts
for such creditor.” 15 U.S.C. §1692a(6)
(A). Therefore, while an original
creditor’s claim that is past the statute
of limitations may be disallowed, the
creditor would not be in violation of the
FDCPA. Having said that, some states
have their own laws which are in many
respects similar to the FDCPA and
which expand some of its protections to
cover original creditors (e.g. California
Rosenthal FDCPA; Iowa Debt Collection
Spring 2015
Practices Act; North Carolina Debt
Collection Act; West Virginia Consumer
Credit & Protection Act; etc.). So check
your own state statutes to see how they
might support such a claim against an
original creditor.
It should also be noted that the Second
Circuit Court of Appeals held that
filing a proof of claim in bankruptcy
court cannot form the basis of an
FDCPA violation. Simmons v. Roundup
Funding, LLC, 622 F.3d 93 (2nd. Cir.
2010). However, the facts in Simmons
appear markedly different from the facts
in Crawford. In Simmons, the debtor
alleged that the proof of claim filed
by the defendant misrepresented the
amount of the debt, as the bankruptcy
court reduced the claim from $2,039.21
to $1,100. The creditor in Crawford
has filed a petition for certiorari to the
U.S. Supreme Court, so stay tuned for
more possible developments on this
interesting issue.
National Association of Consumer Bankruptcy Attorneys