The U.S. Court of Appeals for the Eighth Circuit recently held that a secured party’s foreclosure did not discharge an otherwise valid security interest in the proceeds of the collateral, nor did it preclude the creditor from pursuing its rights to such proceeds.

On July 10, 2014, the United States Court of Appeals for the Eleventh Circuit issued its opinion in Crawford v. LVNV Funding, LLC. That opinion began by decrying the “deluge” of proofs of claim filed by debt buyers on debts that are unenforceable under state statutes of limitations.

The U.S. Court of Appeals for the Eighth Circuit recently held that “[a]n accurate and complete proof of claim on a time-barred debt is not false, deceptive, misleading, unfair, or unconscionable under the FDCPA.”

In arriving at this holding, the Court declined to follow the Eleventh Circuit’s rulings in Crawford and Johnson.

A copy of the opinion is available at:  Link to Opinion.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently affirmed an order of the bankruptcy court granting a debtor’s motion to avoid a judgment creditor’s lien on the debtor’s residence held in tenancy by the entirety with his non-debtor spouse, holding because the lien “fixed” under the Bankruptcy Code and thus impaired the debtor’s claimed exemption, it was avoidable.

A copy of the opinion is available at:  Link to Opinion.

The United States Bankruptcy Appellate Panel for the Eighth Circuit recently held that filing a proof of claim on a time-barred debt is not, alone, a prohibited debt collection practice under the federal Fair Debt Collection Practices Act.

A copy of the opinion is available at: Link to Opinion.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently affirmed a bankruptcy court’s holding that a creditor held an unenforceable lien against a debtor’s real property because the property was owned by the entireties and the lien was thus avoidable under Bankruptcy Code § 522(f)(1). 

A copy of the opinion is available at: Link to Opinion.

The U.S. Court of Appeal for the Eighth Circuit recently affirmed a bankruptcy court’s rejection of a proof of claim filed by a creditor where the claim was based upon a debt which was time barred by the creditor’s failure to comply with the applicable state law deadline for pursuing a deficiency judgment following a non-judicial foreclosure. 

A copy of the opinion is available at: Link to Opinion.

In Dahlin v. Lyondell Chemical Co., 2018 U.S. App. LEXIS 1956 (8th Cir. Jan. 26, 2018), the Eighth Circuit Court of Appeals rejected an argument that bankruptcy debtors were required by due process to provide more prominent notice of a case filing than they did, such that the notice might have been seen by unknown creditors with claims to assert.

The Bottom Line

In Lariat Cos. v. Wigley(In re Wigley), Case No. 18-3489 (8th Cir. March 9, 2020), the Eighth Circuit held that a claim against Debtor B that arose out of a fraudulent transfer made by Debtor A to Debtor B was subject to the statutory cap applicable to lease rejection damages where Debtor A’s underlying liability was premised on its breach of a lease.

What Happened?

The Bottom Line: