Home » supreme court case

Supreme Court Issues Decision on Debt Collectors

Debt collectors are known to use a variety of scare tactics to force individuals into paying a debt. A recent Supreme Court case, however, issued a decision on how to define the role of debt collectors. In the case of Midland Funding LLC v. Johnson, the Court held that a debt collector who files a claim that is barred by the statute of limitation will be considered to have engaged in deceptive, false, or misleading conduct and therefore will not be found to have violated the federal Fair Debt Collection Practices Act. The Case in Question The case in question is Midland Funding LLC v. Johnson, which arose in 2014 after Aleida Johnson filed a civil lawsuit against Midland Funding LLC on the basis that Midland had violated applicable law when it filed a proof of claim in Johnson’s bankruptcy case for a credit card debt whose state statute of limitations had already expired. The district court held that Midland’s conduct did not violate the law, but the Eleventh Circuit Court of Appeals later reversed this decision. The Supreme Court ultimately reversed the Eleventh Circuit’s decision and found that the creditor’s action was not deceptive, false, or misleading. The Supreme [...]

Supreme Court Decides Bankruptcy Case

The Supreme Court recently ruled that the Fair Debt Collection Practices Act (FDCPA) prohibits individuals who think that they are experiencing abusive debt collection practices to initiate legal actions against banks have bought defaulted loans from other lenders. The Supreme Court’s rule now states the FDCPA does not apply to a company unless that company is collecting debts. This landmark bankruptcy decision is also unique in that it is the first majority opinion written by recently elected Justice Neil Gorsuch. The Case at Hand The case of Henson v. Santander Consumer USA was heard by the Supreme Court concerns a group of debtors who defaulted on their auto loans and tried to initiate a legal action against a group of debtors who defaulted on their auto loans on the basis of predatory collection practices. The Supreme Court, however, found that because Santander owned and serviced the debt, Santander and other similar companies cannot be sued under the FDCPA. Regulations Under the FDCPA The FDCPA prohibits collection agencies from using abusive, deceptive, or unfair practices. These are several types of prohibited activities including: Harassing or using oppressive practices against debtors. Threatening that a lawsuit will be filed against a person when [...]