Judge Grants MTD in FDCPA Case Over Collection of BK Debt

A Magistrate Court judge in Puerto Rico has granted a defendant’s motion to dismiss after it was sued for violating the Fair Debt Collection Practices Act because it sent a letter to an individual attempting to collect on a debt that had been included in a petition for bankruptcy, ruling it was not the defendant’s obligation to know that the bankruptcy had been filed.

A copy of the ruling in the case of Carrasquillo v. CICA Collection Agency can be accessed by clicking here.

The plaintiff received a collection letter from the defendant. The debt in question, however, had been included in a bankruptcy filing by the plaintiff.

The defendant claimed it was never notified of the bankruptcy filing, either by the plaintiff or the original creditor that the defendant was collecting the debt on behalf of, and that it did not receive notice from the Bankruptcy Court.

Ultimately, ruled Judge Camille L. Velez Rive of the District Court for the District of Puerto Rico, the error lies with the original creditor. Without knowledge from the original creditor or the bankruptcy court, there was no way for the defendant to know the plaintiff had filed for bankruptcy protection, the judge ruled. “There cannot be liability by Defendant who did not know of the bankruptcy proceeding, a fact which has been made clear by the filings in the bankruptcy court,” the judge wrote.

Rather than notifying the defendant that a bankruptcy filing had been made, the plaintiff instead chose to file this lawsuit. The plaintiff argued that the letter, which stated that the creditor was a “client” of the defendant, did not clearly indicate the name of the creditor to whom the debt was owed. “Plaintiff’s rather farfetched reading of the statute is nonsensical, and the Court cannot give credence to his overtly and unnecessarily strict reading of the statute,” the judge wrote.

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