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

[EC]

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.

Justice Sonia Sotomayor dissented, joined by fellow liberals Ruth Bader Ginsburg and Elena Kagan, and excoriated the business practices of debt collectors.

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

Strange days when I'm agreeing (sort of) with Sotomayor.

Why the hell don't we have a law section, anyways?

[Frank Cannon]

This is the most meaningless ruling ever. The only way these debt collectors can collect this debt is of the person is too stupid to know there is no mechanism to get it. Since GA has this 6 year rule, this lady doesn't have to do squat and the collector can't do anything but call and send letters.

[anubias]

I'm in the same boat, EC.  I am floored that I agree with Sotomayor on this.  If the woman filed bankruptcy and the statute of limitations had run out, I don't think debt collectors should still be allowed to harass the woman.

[Weird Tolkienish Figure]

I'm in the same boat, EC.  I am floored that I agree with Sotomayor on this.  If the woman filed bankruptcy and the statute of limitations had run out, I don't think debt collectors should still be allowed to harass the woman.

I had believed that they can try all they want, using legal methods, to collect the debt after the SoL, they just have no legal remedy, not even credit reporting, if the person refuses to pay.

[driftdiver]

This is the most meaningless ruling ever. The only way these debt collectors can collect this debt is of the person is too stupid to know there is no mechanism to get it. Since GA has this 6 year rule, this lady doesn't have to do squat and the collector can't do anything but call and send letters.

Which they will do multiple times a day.     They will lie cheat and steal to get *their* money.

[Taxcontrol]

This is the most meaningless ruling ever. The only way these debt collectors can collect this debt is of the person is too stupid to know there is no mechanism to get it. Since GA has this 6 year rule, this lady doesn't have to do squat and the collector can't do anything but call and send letters.

True,
However I ask the question, "When does the debt collector's actions become harassment?"
I would assert that once the debt is no longer LEGALLY collectible, and once the debtor requests the collector to stop the collection efforts, that further actions would be harassment.

[thackney]

https://www.consumerfinance.gov/askcfpb/336/what-is-harassment-by-a-debt-collector.html

What is harassment by a debt collector?

Answer: Harassment by a debt collector can come in different forms but examples include repetitious phone calls intended to annoy or abuse, obscene language, and threats of violence.

[anubias]

I had one call me one time to tell me that my neighbors across the street were delinquent on a loan and requested I go over there to give them the message to call them ASAP.  I would consider calling neighbors to embarrass the debtor harassment.

[Applewood]

My phone number once belonged to someone named Gregory Wilson. I know because not long after I obtained this number, I received numerous calls from various debt collectors looking for him. The calls eventually subsided once I let the collectors know Wilson no longer had this number, but it seems he's started using my number as his contact again.  I'm getting calls from a whole new set of collectors.

Most of the collectors were polite enough, but I had a couple of them accuse me of hiding the deadbeat and even threatening me if I didn't disclose the debtor's whereabouts. I laughed and hung up.   Believe me, if I knew where Gregory Wilson lived, I'd give him a good thumping. 

[Gefn]

 This will not work if you have a hotel on Park Place or Boardwalk.

 

[Gefn]

My phone number once belonged to someone named Gregory Wilson. I know because not long after I obtained this number, I received numerous calls from various debt collectors looking for him. The calls eventually subsided once I let the collectors know Wilson no longer had this number, but it seems he's started using my number as his contact again.  I'm getting calls from a whole new set of collectors.

Most of the collectors were polite enough, but I had a couple of them accuse me of hiding the deadbeat and even threatening me if I didn't disclose the debtor's whereabouts. I laughed and hung up.   Believe me, if I knew where Gregory Wilson lived, I'd give him a good thumping.

That happened with my cell phone.years ago.  Verizon gave me a new number. They were actually gracious about it, and gave me a free month to apologize.  @Applewood

[Smokin Joe]

I had one call me one time to tell me that my neighbors across the street were delinquent on a loan and requested I go over there to give them the message to call them ASAP.  I would consider calling neighbors to embarrass the debtor harassment.

Agreed.

I got one of those calls. I asked "What does it pay?" "Uh, well, uh...", I said, "Do your own work (characterization deleted), and don't call me again!".

[driftdiver]

I had one call me one time to tell me that my neighbors across the street were delinquent on a loan and requested I go over there to give them the message to call them ASAP.  I would consider calling neighbors to embarrass the debtor harassment.

@anubias

It's illegal to do that.  You should tell your neighbor so he can sue.

[Weird Tolkienish Figure]

You guys would hate me. I was at one time seriously considering starting my own debt collection agency.

I put quite a bit of research into it.

Most people do not respond to negativity, but they will respond to a threat to their credit report, and if you are willing to work with them, many will be reasonable, especially if they are trying to put their lives back together.. You can often buy debt in bulk for pennies on the dollar. Judgement collection agencies are a thing too (buying small claims court judgements)

Collection agencies use a service called skip tracing, to track people down. This is a highly secretive industry and they don't really expose their tactics. They usually use a variety of means including public records.

Texas actually has the most "consumer friendly" (read that as "deadbeat friendly") laws in the nation. Way more lenient on debtors than more "liberal states".

Many collection agencies do blatantly illegal things that put them at risk for a big fat lawsuit. If you are a consumer, know your rights. Being in debt doesn't make you any less of a human being. If you are a collection agency, you better have a good lawyer on retainer, and scan what your agents are doing/saying.

[Applewood]

@Weird Tolkienish Figure

I don't hate you.  Actually, I don't mind debt collectors.  My cousin's first job after college was as a manager of a debt collection agency.   He didn't stay long though. 

Debt collectors are a necessary evil.  How much money is lost if a creditor doesn't at least try to collect a debt from a deadbeat debtor.  Most creditors don't have the time or resources to go after the deadbeats, so they need the services of a professional. 

If you run into trouble, most creditors will try to work something out.  I had a situation some years ago where I could not pay a few creditors according to plan.  I called them ASAP,  explained the situation and we worked it out.    And it seems they must not have reported me to the credit bureaus because my credit was intact.  If you ask for help from the creditor and fulfill your obligations under any new arrangement, odds are you won't have to deal with collectors. 

The trouble comes from irresponsible types like this Wilson guy I mentioned in my prior post.  He's a professional deadbeat.  As far as I know, he has stiffed 2 car dealerships, a jeweler  and a furniture store.  There could be more.  The more recent calls are from collectors representing lenders who made student loans to this deadbeat.  One lender loaned this guy money under a federal student loan program.  Our tax dollars at work.  Didn't anyone bother to check his credit history before loaning him our money?  Guess not.   

By the way, this guy is one of the reasons I don't favor blanket student loan forgiveness, which is floated by the commie left from time to time.

My cousin told me that he and his employees were under considerable pressure to get results.  So maybe that's why so many collectors go out of bounds from time to time.  But that doesn't excuse the threats, annoyances, harassment and talking to the neighbors.  The collectors should be assertive, not aggressive.  They should not be terrorists.  We have enough of those.

[EC]

While I agree with all your points - debt collectors should also respect the cut off points for old debt, especially after bankrupcy. They are there for a reason.

[anubias]

@anubias

It's illegal to do that.  You should tell your neighbor so he can sue.

It was at least ten years ago when we lived elsewhere.  I realized later that I probably should have, but I didn't want to embarrass them at the time.  :/

[Weird Tolkienish Figure]

While I agree with all your points - debt collectors should also respect the cut off points for old debt, especially after bankrupcy. They are there for a reason.

It is usually not illegal for a debt collector to try to collect on debts that have passed the statute of limitations. They simply have no legal recourse if you choose not to pay them. Such debt is usually bought at a very low price as chances of collection are low.

[sneakypete]

This will not work if you have a hotel on Park Place or Boardwalk.

 

@Freya
If you have a hotel on Park Place or Boardwalk,you have a whole team of rabid lawyers on retainer standing between you and debt collectors.

[Wingnut]

Just after relocating I received an official letter from a Lawmill in Miami notifying me that they were attempting to collect a debt for the City of BFE in the State of Iaway for an unpaid parking ticket back 1996.  Seems my son failed to abide by the odd/even snow removal ordinance of BFE Iowa.  Knowing full well the statute of lims had run out ...i 13 filed it.  after two more letters they gave up.  They always do.

[Cripplecreek]

It is usually not illegal for a debt collector to try to collect on debts that have passed the statute of limitations. They simply have no legal recourse if you choose not to pay them. Such debt is usually bought at a very low price as chances of collection are low.

When my mother died we had to run a notice in the paper for 30 days to alert potential creditors that uncollected debts after 30 days would no longer be collectable. Only her trash disposal company showed up for their $70 and they were very cool about it. They let me pay off the bill and waived the late fees. They then let me restart the service at an introductory rate so my cousin could get a head start when he moved in.

Just yesterday I got my bill and its at the introductory rate. They sent a note thanking me for being a good customer and settling my mother's bill promptly