@Dalmus wrote:
It doesn't surprise me that it is Midland Funding. They are generally a pretty slimey operation.
I get the argument, though, even if its in bad faith. While there's a State SOL on debt, there is no Federal SOL on debt... Bankruptcy is a Federal action, so the junk debt buys use that as their "in."
Those articles don't seem to have been written by people that understand the process... So I am confused as to what the actual hearing is about.
Is Johnson being forced to pay this debt beause she didn't notice it and request that the Trustee deny the claim bases on State SOL, or is Midland Funding fighting the fact that they were denied payment by the Trustee?
By the time a case gets to this point, it's usually less about who owes what, and more about setting precedent and making sure that rulings are consistent nationally.
In this case, the 11th Circuit viewed the FDCPA as overriding the Federal Bankruptcy Code, and ruled in favor of Johnson. (Midland is the one who appealled to SCOTUS.)
In other cases, at least the 2nd, 4th, 8th, and 9th Circuits have held the opposite view, that FDCPA requirements don't apply in bankruptcy cases.
That's what really at issue here, and why certiorari was granted - to put it bluntly, the SCOTUS doesn't really care about Ms Johnson's specific debt being valid under her Chapter 13 plan. They do care about getting the circuit courts all on the same page.
A possibly interesting side-effect, based on some of the questions during oral arguements, is we might see a ruling on how much effort a creditor is required to put into checking collectibility of debts before bringing them to a bankruptcy trustee or to a court for a suit. It'll be interesting to watch.
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