In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit Court of Appeals examined whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt Collection Practices Act (“FDCPA”), as opposed to seeking relief in the bankruptcy court.
The U.S. District Court for the Middle District of Florida recently dismissed allegations that a debt buyer violated the federal Fair Debt Collection Practices Act by filing a proof of claim on time-barred debt, holding that such claims are precluded by the Bankruptcy Code, and that the FDCPA does not provide a private right of action against debt collectors who file time-barred proofs of claim in bankruptcy court.
The language of Bankruptcy Code § 501(a) is as broad as it is simple.
The issue of whether the Bankruptcy Code precludes claims under the FDCPA took another twist in an opinion issued by the Second Circuit last week. In a pro consumer opinion, the Second Circuit seemingly changed direction by reversing the Southern District of New York’s dismissal of FDCPA claims which arose in part as a result of violations of the discharge injunction. See Garfield v. Ocwen Loan Servicing, LLC, 2016 U.S. App. LEXIS 3 (2ND Cir. Jan. 4, 2016).
The U.S. District Court for the District of New Jersey recently dismissed a debtor’s claims for violations of the federal Fair Debt Collection Practices Act (FDCPA) and the New Jersey Truth in Consumer Contract Warranty and Notice Act (TCCWNA), holding the debtor’s failure to schedule his lawsuit as an asset of his bankruptcy estate deprived him of standing to later assert the claims.
The U.S. District Court for the District of New Jersey recently dismissed a debtor's claims for violations of the federal Fair Debt Collection Practices Act (FDCPA) and the New Jersey Truth in Consumer Contract Warranty and Notice Act (TCCWNA), holding the debtor's failure to schedule his lawsuit as an asset of his bankruptcy estate deprived him of standing to later assert the claims.
A copy of the opinion is available at: Link to Opinion
Courts continuing to deal with Crawford copycat claims are bringing a sharper focus to the issue and looking closely at the conflict presented by the FDCPA and Bankruptcy Code. Three courts who have recently reviewed Crawford claims have dismissed them, concluding in all three cases that the filing of an otherwise accurate time barred proof of claim does not give rise to an FDCPA claim.
In Jenkins v. Midland Credit Management, Inc.,[1]the U.S. Bankruptcy Court for the Northern District of Alabama held that the filing of a proof of claim based on a time-barred debt cannot give rise to a claim for damages under the Fair Debt Collection Practices Act (“FDCPA”), reasoning that any such claim is precluded by the Bankruptcy Code’s comprehensive claims-allowance procedure.
The U.S. Court of Appeals for the Ninth Circuit recently held that a debt collector’s demand seeking 10 percent interest that was not expressly authorized by the debt agreement did not violate the federal Fair Debt Collection Practices Act or California’s equivalent Rosenthal Act, because the pre-judgment interest was permitted by state law.
A copy of the opinion is available at: Link to Opinion.
Two years ago, in Simon v. FIA Card Services, N.A., the Third Circuit held that alleged violations of the FDCPA resulting from conduct in a bankruptcy case were not precluded by the Bankruptcy Code.