Filing Proof of Claim in Bankruptcy May Violate FDCPA

The Eleventh Circuit Court of Appeals has held that filing a proof of claim on a time-barred debt violated the Fair Debt Collection Practices Act (FDCPA) in the case of Crawford v. LVNV Funding, LLC.  LVNV filed a proof of claim in Crawford's bankruptcy case on a debt for which the statute of limitations had passed.  Crawford then filed an adversary proceeding against LVNV in which Mr. Crawford alleged LVNV filed proofs of claim routinely on time-barred debts and that such acts violated the FDCPA.

The Bankruptcy Court held against Mr. Crawford, and the U.S. District Court affirmed the Bankruptcy Court on appeal.  However, the Eleventh Circuit reversed and held that such acts violated the FDCPA's prohibition on unlawful direct and indirect attempts to collect a debt.  The Court analogized to filing suit on time-barred debt, which is a violation of the FDCPA.

This is an important ruling in favor of consumers, and further protects them from debt collectors attempting to skirt the law.  It will be interesting if other circuits follow the lead of the Eleventh Circuit. 

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Mitchell's Story

Mitchell (the name is changed to protect our client's privacy) came to us for a Chapter 7 bankruptcy consultation. When we went over his credit report, we noticed several blatant violations of the Fair Debt Collection Practices Act (FDCPA), a powerful federal law that prohibits debt collectors from using unfair or abusive practices to collect debts.

The primary violation we found on Mitchell's credit report was the addition of interest to his credit card debts by debt collectors who purchased the debts that had been charged off by the credit card companies. These debt collectors purchase charged off debt for pennies on the dollar and then attempt to collect the entire amount of the debt, and in many instances, add unlawful interest to the amount.

We also collected damages for Mitchell from two law firms that also violated the FDCPA. One of them filed suit after the statute of limitations (the date by which suit has to be filed) had expired. The other misrepresented the nature of the debt they were trying to collect.

We were able to stop a garnishment that had been issued by a Florida court against Mitchell for another debt. And, Mitchell got back the money garnished from his paycheck.

So, what did our fight with five debt collectors and two law firms cost Mitchell? Not one red cent. We collected our fees from the debt collectors and the law firms. In the end, Mitchell had nearly all of his debt forgiven, negative information regarding the debts removed from his credit report, and several thousand dollars in damages in his pocket. And, to think he came in to declare bankruptcy!

Your situation may be different than Mitchell's, and your outcome could also vary. But, you have absolutely nothing to lose by letting us take a look to see if we can help. Call for a free consultation at (502) 245-9100 or toll free at (866) 279-9721. Or, if you prefer, email us at info@debt-relief-law.com.

Collector Abuse--Fight Back

Debt collectors can't use abusive tactics to try to extract money from you.  For instance, they can't continually call you in an attempt to harass you into paying them.  They can't call you at work if you inform them that your employer doesn't allow such calls.  And, if they continue to do this, they have violated the Fair Debt Collection Practices Act (FDCPA).  If this happens to you, call us or any qualified lawyer who can sue the debt collector under the FDCPA.  We have had great success for our clients, for example, we most often (1) get their debt forgiven never to be sold to another collector, (2) negative information pertaining to the debt removed from their credit report, (3) $1000 in statutory damages or their actual damages if greater, and (4) our attorney fees paid.

You don't have to take it.  You can fight back.  And remember, even if you owe the money, debt collectors can't violate the law to collect from you.

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