Eighth Circuit Holds That Filing Accurate Proof of Claim on Time-Barred Debt Does Not Violate the FDCPA -
Nelson v. Midland Credit Mgmt., Inc., No. 15-2984, 2016 WL 3672073 *1 (8th Cir. July 11, 2016) -
On July 11, 2016, the United States Court of Appeals for the Eighth Circuit split from other circuit courts and issued a precedential decision holding that the filing of a proof of claim on a time-barred debt in a consumer bankruptcy action did not violate the Fair Debt Collection Practices Act (FDCPA). In Nelson, the debtor defaulted on a consumer debt in November 2006 and filed for Chapter 13 bankruptcy relief in February 2015. The creditor filed a proof of claim in the bankruptcy court for the amount of the debt. The consumer objected to the proof of claim on the basis that it was time-barred. The bankruptcy court agreed with the consumer and disallowed the claim.
The consumer subsequently commenced suit against the creditor, alleging that it violated15 U.S.C. §§ 1692d, 1692e and 1692f of the FDCPA by filing a proof of claim on a time-barred debt in his bankruptcy proceeding. The district court held that the FDCPA was not implicated and granted the creditor's motion to dismiss for failure to state a claim.
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