A recent decision from a trial court sitting in Illinois calls into question whether debt collectors can rely on a widely used disclosure when collecting debt that may be subject to an expired limitations period.

A copy of the opinion in Richardson v. LVNV Funding, LLC is available at:  Link to Opinion.

In a 5-3 decision handed down on May 15, the Supreme Court of the United States held that the federal Fair Debt Collection Practices Act (FDCPA) is not violated when a debt collector files a proof of claim for a debt subject to the bar of an expired limitations period. The decision:

The U.S. Supreme Court heard oral argument Tuesday in Midland Funding v. Johnson. A primary issue before the Court is whether the federal Fair Debt Collection Practices Act is violated by the filing in a Chapter 13 bankruptcy case of a proof of claim representing a debt subject to an expired limitations period. The case originated from the Eleventh Circuit Court of Appeals, which along with its earlier decision in Crawford v. LVNV, held the FDCPA is violated in those instances. Every other Circuit Court of Appeals has since found otherwise.

Filing a proof of claim with a bankruptcy court representing a debt subject to an expired state law limitations period does not violate the federal Fair Debt Collection Practices Act (FDCPA) under an opinion released yesterday from the Seventh Circuit Court of Appeals.

Under the ruling, in Owens v. LVNV, the Seventh Circuit joins the Eighth Circuit Court of Appeals in rejecting the Eleventh Circuit’s holding under Crawford v. LVNV that such proofs of claim violate the FDCPA.

The true effects of the events of the last few days have yet to be seen. With the mainstream political parties acting like participants in a ‘Compose a Greek Tragedy’ competition, a government unlikely to exercise any meaningful executive functions until autumn (at least), the currency and financial markets in turmoil and the future uncertain on a range of factors, it is tempting to succumb to a condition of inaction whilst waiting to see how the cards fall.