Appeals Court Affirms Ruling for Defendant in FDCPA Case Over Time-Barred Claim During BK

The Court of Appeals for the Eleventh Circuit has upheld a lower court’s decision in a Fair Debt Collection Practices Act case after filing proof-of-claim notices on time-barred debts during bankruptcy proceedings.

A copy of the ruling in the case of Somohano v. PRA Receivables Management LLC, Cavalry SPV I, LLC can be accessed by clicking here.

The plaintiff filed for Chapter 13 bankruptcy protection. The defendants filed proof-of-claim notices alleging they were owed unsecured credit card debts. The plaintiff objected and the bankruptcy court agreed that the debts were time-barred. The plaintiff then filed suit, alleging the defendant violated Sections 1692e an 1692f of the FDCPA by using unfair or unconscionable means to collect on a debt and making false, deceptive, or misleading representations.

The Eleventh Circuit had previously ruled that filing a time-barred claim violated the FDCPA, but that decision was overturned by the Supreme Court in Midland Funding v. Johnson. In that ruling, the Supreme Court determined that filing a time-barred claim during bankruptcy proceeding was not a violation of the FDCPA, as long as the claim indicated that the statute of limitations had expired.

Acknowledging that this course was not governed by the ruling in Midland Funding, the Eleventh Circuit affirmed the lower court’s ruling that because the defendants indicated in their claim that the statute of limitations had expired, they can not be considered false, deceptive, or misleading under the FDCPA.

“Despite the statute of limitations, PRA and Cavalry had a continuing right to payment and the right to submit proofs of claim in Soler’s bankruptcy proceeding,” the Eleventh Circuit wrote.

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