Filing a Proof of Claim after Crawford: the Potential for Creditors to Face FDCPA Violations in the Eleventh Circuit

Burr & Forman
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The language of Bankruptcy Code § 501(a) is as broad as it is simple. "A creditor or an indenture trustee may file a proof of claim." The Bankruptcy Code's definition of "claim" only broadens § 501(a)'s scope: a "claim" means any "right to payment," regardless of whether or not that right is presently enforceable. Based on that definition, any creditor is entitled to file any proof of claim based on a right to payment.

Up until 2014, the Fair Debt Collection Practices Act (the "FDCPA") did not restrict a creditor's entitlement to file a proof of claim. The FDCPA is a consumer protection statute that prohibits "false, deceptive, or unfair" debt-collection practices. For instance, a debt collector violates the FDCPA when it threatens to sue or files suit in state court on a time-barred debt. But prior to 2014, the FDCPA did not affect a creditor's ability to file a proof of claim in a bankruptcy case. Multiple courts within the Eleventh Circuit held that the time-barred nature of a debt does not impact a creditor's right to file a proof of claim; to provide an FDCPA cause of action for this conduct would undermine creditors' rights in the bankruptcy process. If the proof of claim was for a time-barred debt, the debtor simply needed to file an objection under the Bankruptcy Code's claims objection process. The FDCPA was simply unnecessary to protect a debtor from improper claims, because the Bankruptcy system provided that protection.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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