This case literally hit close to home considering the original opinion came out of Middle District of Alabama Bankruptcy Court and the case involved issues our firm encounters on a daily basis. A very brief summary of the facts: debt collector buys old debt which is barred by the statute of limitations. Debtor then files a bankruptcy case, in this instance a Chapter 13, and creditors are given an opportunity to file "proof of claims" in order to be paid. The issue before SCOTUS earlier this month:
1. Whether the filing of an accurate proof of claim for an unextinguished time-barred debt in a bankruptcy proceeding violates the Fair Debt Collection Practices Act.
2. Whether the Bankruptcy Code, which governs the filing of proofs of claim in bankruptcy, precludes the application of the Fair Debt Collection Practices Act to the filing of an accurate proof of claim for an unextinguished time-barred debt.
The Court ultimately held that, during Johnson's Chapter 13 bankruptcy case, Midland Funding's filing a proof of debt owed claim that was knowingly time-barred under Alabama law did not constitute a "false, deceptive, misleading, unfair, or unconscionable debt collection practice under the Fair Debt Collection Practices Act."
Read more about the opinion and dissent here: