New Case on Bankruptcy Stale Claims and the Fair Debt Collection Practices Act
What happens when a creditor files a claim for a time-barred debt in a consumer bankruptcy case? Not too long ago, the U.S. Court of Appeals for the Eleventh Circuit ruled that such a filing violated the Fair Debt Collection Practices Act (FDCPA), in effect ruling in favor of the debtor. However, according to a recent article from Bloomberg BNA , the U.S. Court of Appeals for the Eighth Circuit has “split from other circuit courts” by holding that “a claim subject to a statute of limitations defense could be filed in the bankruptcy case without violating the FDCPA.” The case is Nelson v. Midland Credit Mgmt., Inc. , and it was decided on July 11, 2016. Why should Oak Park residents who are thinking about filing for personal bankruptcy pay attention to a case like this one? Implications of Cases Regarding Stale Claims in Bankruptcy What does this mean for debtors in Illinois? While bankruptcy cases from the Chicago area are not governed by either the Eleventh C...