On May 15, 2017, the United States Supreme Court issued its decision in Midland Funding, LLC v. Johnson, 581 U.S. ___ (2017) in which it held that filing an “obviously time-barred” proof of claim in a bankruptcy proceeding does not violate the Fair Debt Collection Practices Act (FDCPA).
The facts of Midland Funding are fairly straightforward. The respondent filed for personal bankruptcy under Chapter 13 of the Bankruptcy Code (Code). Midland, the petitioner, filed a proof of claim in the respondent’s bankruptcy on account of a credit card debt. The proof of claim, however, demonstrated that the debt was barred by the applicable Alabama statute of limitations. The respondent’s counsel objected to the claim, Midland did not respond, and the Bankruptcy Court disallowed the claim. Continue Reading