U.S. Supreme Court Hands Collection Industry a Win in Case Supported by ACA International


5/15/2017 1:00:00 PM

Supreme Court threw out the Eleventh Circuit decision in the Johnson case, holding that filing an out-of-statute proof of claim in bankruptcy does not violate the FDCPA

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ACA International, the Association of Credit and Collection Professionals, lauds the U.S. Supreme Court’s decision to reverse the Eleventh Circuit’s ruling that stopped debt collectors from filing claims in bankruptcy on old debts.   

The U.S. Supreme Court ruled 5-3 on Monday, May 15, in favor of the credit-and-collection industry, in the case of Midland Funding, LLC v. Johnson, in which the key issue was whether the debt collector is subject to the FDCPA for filing a stale proof of claim.  

“This is an important issue for our industry, and ACA International continues to be involved in the courts to protect our members’ ability to recover rightfully owed obligations—including debts that remain valid under the law even after the statute of limitations has expired,” ACA International CEO Pat Morris said. “The economic and social benefit that the credit-and-collection industry provides applies with no less force to time-barred debt or other debt.”

“The credit-and-collection industry has relied on a long and consistent series of judicial opinions, going back at least to the 1990s, under which a debt collector or a debt buyer can participate in the bankruptcy process without running afoul of the FDCPA.”

“Three years ago, the Eleventh Circuit’s holding in Crawford v. LVNV Funding, LLC, called that longstanding and consistent interpretation into question, with results that have confused the credit-and-collection industry, have created an unnecessary conflict between two federal statutes and among the circuit courts of appeals, frustrated the bankruptcy code’s purpose of giving debtors a fresh start, and unfairly imposed liability on debt collectors.”

“ACA International is pleased that the Supreme Court has corrected the Eleventh Circuit’s frustrating and confusing error, and has restored the status quo ante that had worked successfully for decades,” Morris said.

ACA International (ACA), the association of credit and collection professionals, is the largest membership organization in the credit and collection industry. Founded in 1939, ACA brings together third-party collection agencies, law firms, asset buying companies, creditors and vendor affiliates, representing tens of thousands of industry professionals. ACA produces a wide variety of products, services and publications, including educational and compliance-related information; and articulates the value of the credit and collection industry to businesses, policymakers and consumers. www.acainternational.org.

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