U.S. top court rules in favor of debt collector in bankruptcy dispute

[Eugene]

Source: Reuters

The U.S. Supreme Court on Monday handed a victory to debt collectors, ruling that people who have filed for bankruptcy cannot sue companies that try to recoup old debt that is not required to be paid back under state statutes of limitations.

The justices, in a 5-3 decision, ruled in favor of Midland Funding, a subsidiary of Encore Capital Group Inc, which was sued by an Alabama debtor named Aleida Johnson who entered bankruptcy in 2014.

Liberal Justice Stephen Breyer joined four of the court's conservatives in the majority. Writing for the court, Breyer said Midland's action was not "false, deceptive or misleading" under the Fair Debt Collection Practices Act, the federal law under which Johnson brought her lawsuit.

Midland sought payment of $1,879 in debt that Johnson had incurred more than a decade earlier. Alabama law sets a six-year statute of limitations for debt to be collected.

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Read more: http://www.reuters.com/article/us-usa-court-debt-idUSKCN18B1TO

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SUPREME COURT | Mon May 15, 2017 | 10:50am EDT
By Lawrence Hurley | WASHINGTON

[neeksgeek]

1. So the SCOTUS just nullified bankruptcy?

Somebody with legal knowledge please weigh in here. Does this mean that bankruptcy no longer offers any actual protection from creditors?

Or is that an overly simplistic reading?

[cstanleytech]

4. If I am reading it right it sounds more like they are saying in essence

"The way the law is written currently doesnt cover this situation and we cant change the law to fix the loophole as only Congress can do that."

[7962]

5. No. The thing to remember is to never reply to people like this

Last edited Mon May 15, 2017, 01:58 PM - Edit history (1)

Once you reply they can start the 6 yr clock al over again. usually these companies buy old debt for pennies on the dollar and offer you a payoff. Say you owed 2500, they may say "give us 850 and we'll settle it". But if its past the cutoff time, its probably no longer on your credit report. Just ignore the letter and they'll give up eventually. But if you respond, they can put it back on your credit report.
Theres nothing illegal about trying to recoup a debt thats past the "expiration" date is what the court ruling says.

Everyone can get a free copy of their credit report yearly at annualcreditreport.com. Its the ONLY site backed by the govt thats really free & accurate. The better option is to just pick 1 of the 3 and get the report, then 4 months later get it from the 2nd one and so on. that way you can get 3 free reports each year

Here is some "official" infor from the govt
https://www.consumer.ftc.gov/blog/tick-tock-goes-clock-old-debts

They even say here, you do not have to pay an expired debt. But get that credit report!!! And its FREE using the site i mentioned

[left-of-center2012]

9. "Just ignore the letter and they'll give up eventually"

I went through a bad period about 10 years ago and had several collection agencies try to collect on older debts.
As has been stated, they buy debts for pennies on the dollar.

They'll keep saying "Just give us something, anything ..."
Once you pay anything on an old debt, it makes it good again and they can come after you in court.

One thing I learned was if you tell them you feel they are harassing you and you will report them, they stopped immediately.

If they called me, I told them they were harassing me.
If they mailed me a bill, I wrote back saying they were harassing me.

It worked every time.

Today I am happy to say I have a 801 credit score (out of 850).

[7962]

15. Great for you!! Not many get above 800.

I'll toot my own horn and say my latest is 835; the highest its ever been

[Stuart G]

10. Thank You for this information...It will posted again in Consumer Advise..

That information is very important. I hope you do not mind my posting it again....you will be given total credit..

[7962]

16. Not at all, I'm going to add in a link on my original post from the FTC site.

Again, main thing is to look at your credit report
And i must also apologize for initially saying "free credit report", it should be "annualcreditreport.com" I have updated the post.

[MosheFeingold]

12. Not exactly

Merely replying does not "restart the clock." It takes something like paying to start it or a reaffirmation of the debt (saying "I owe it.&quot .

And replying does create rights under the FDCA, in that they must cease contacting you.

A example good reply would be:

"I received your letter of 1/1/2017 wherein you allege I owe $1. I do not owe you any money and dispute this debt. Please notify the supposed original creditor that I dispute this debt.

Do not contact me any further, by any means -- in person, phone, email, or letter -- except to acknowledge that I dispute the debt and that you will no longer seek to collect.

Failure to comply will result in a complaint to XYZ state org, ABC Federal Agency, and possibly a civil suit.

Thank you for your timely compliance."

[7962]

14. Reply #9 mentions this as well; telling them they are harassing you can make them cease.

More info here:
https://www.consumer.ftc.gov/blog/tick-tock-goes-clock-old-debts

The key is looking at your credit report. If its not on there, its NOT counting against you

[NewRedDawn]

29. Message deleted by DU the Administrators

[moonscape]

17. I've been happy with

creditkarma.com - free and I can get my credit scores from TransUnion and Equifax whenever I want. The constantly-changing info they have for me is accurate, so if anything became amiss I think I'd know it quickly (if I'm checking!)

[xor]

18. I've been using creditkarma for a little over a year now...

I've been actively trying to clear up my credit and increase my score. It's nice to have a free service that provides so much information and tools. The only downside is that it shows the vantage scores instead of the FICO scores. For awhile my FICO score was a fair bit lower than my vantage scores for whatever reason. Discover has creditscorecard.com that gives a free monthly FICO score update. I'm sure there are other legit free services that give the FICO score, but so far that has worked for me.

[7962]

19. AMEX will show you your FICO once a month too.

Well, they'll show it all month, but its only updated once a month
AMEX platinum delta skymiles card is what i've got, but other versions may show it too

[KWR65]

21. They can not put a collection account back on your credit report

The time it is on your credit reports is up to 7.5 years from the date of default. They can not reage the debt because you make a payment on a collection account. The statute of limitations is entirely separate from your credit report reporting a collection account. For example, some States have ten to 15 years for the statute of limitations to run out. So if you have an 8 year old debt that isn't past the SOL and you pay it off it can not be relisted on your credit reports. JTYWLTK.

[7962]

23. Well, they CAN & do, but its not legal. This is why you get a credit report every year.

Its called "parking". They put an "expired" debt back on your report & wait. Then one day you go to buy a car or a home & it shows up, so you take care of it because you dont have the time to fight it. And most people dont know what YOU stated, so even after they pay they do nothing. It costs the debt companies nothing to do it, so they dont care. But getting a regular copy of your report will prevent that from becoming a problem.

[KWR65]

24. No. You go to a consumer lawyer and file a lawsuit. You get $1000 per violation plus attorney fees.

In the mean time you just file an dispute with the CRA's. Doing this is a violation of their contracts with the CRA's also.

[OKNancy]

6. no, it just means if a nasty debt collector tries to collect on a debt you don't owe

you can't sue them. What you need to do is ignore them.

--- It means if you declare bankruptcy and are approved, you really need to know your rights.
I think the person's lawyer should really educate their clients about this and other rights.

[Adrahil]

22. No....

they are just saying that a debt collector can still try and collect a debt, even if the debt is no longer really collectible. But as the debtor, you can just tell them to get fucked.

I had a credit company try to collect on a debt my mom owed 8 years after she died. They called me. AS her executor, I sent them a letter on her death telling of their rights to file a claim, copy of death certificate, etc. They never filed a claim with the probate court. They could still ask, but I laughed at them and suggest they not waste their time. He estate was closed and I was not going to pay it personally. Personally, if I were her, I'd string them along, just for fun.

[neeksgeek]

25. In another time, I worked for one of the three big credit bureaus...

I won't say which one. We had accounts payable, like any large business. Our standing policy was to tell debt collectors to take a flying leap. We only dealt with the original account, never collection agencies. Never.

[Adrahil]

26. I like it.

Debt collectors are real bottom feeders.

[cstanleytech]

2. Unless the law specifically addresses the issue at hand then I am not surprised by the ruling.

Disappointed? Yes but not surprised as companies have and will exploit loopholes.

[C Moon]

3. Is this leading us back to debtor prisons?

[OKNancy]

7. no

[cstanleytech]

8. No, the debt collectors dont have the power to really collect shit on expired debt the justices

made it clear unless of course someone agrees to actually pay it and even then that wouldnt cause debtors prisons to be opened.

[MosheFeingold]

13. No.

It's actually a pretty sound decision. While there is a flaw in the law that this situation has made clear, it's not the courts' job to fill in holes. That's the job of Congress. It's a basic separation of powers. Given the number of judicial vacancies and how Trump will pack the courts, I don't particularly desire the judiciary to be any more powerful than it is.

And while I despise our current Congress, things change in Congress much faster than in the Court system.

[Wellstone ruled]

11. Interesting ruling,

this will revive the Debtor Prisons,what the hell. It is okay for Corporations to file a BK and never pay their Employees for wages or Benefits and we saw zero penalties.

[turbinetree]

20. WOW, .......WE are now officially an individual that is in a debtors prison without bars

even if you have a statue of limitations for bankruptcy, that is just amazing.

I just wonder, if a spouse is responsible for a student loan that they don't sign paperwork for, of if the individual dies before the loan is paid off and they now are responsible and shall be moved to the line of being a debtor without bars

[former9thward]

27. No, no and no.

Most student loans are now administered by the US Department of Education. If someone dies the loan dies with them. No one owes anything. Even if the loan is with a private bank or company if someone didn't co-sign the loan then they don't owe anything. It does not matter if they are a spouse or parent or child.

[turbinetree]

28. Wado-------------Thank you