Consumer Bankruptcy Journal Spring 2015 - Page 38

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 38 CONSUMER BANKRUPTCY JOURNAL 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