By Gary M. Weiner
and Robert E. Girvan, III
Weiner Law Firm, PC
The Fourth Circuit recently held in Dubois v. Atlas Acquisitions, LLC, No. 15-1945 (4th Cir. August 25,2016) that the filing of a proof of claim based upon a time-barred debt does not violate the Federal Debt Collection Practices Act (FDCPA)(click on the case name to read the opinion).
Congress enacted the FDCPA to prevent debt collectors from using abusive and unfair debt collection practices. Federal courts have consistently held that filing lawsuits or threatening to file lawsuits debts where the statute of limitations has run out is a violation of the FDCPA. However, the Bankruptcy Code in § 502(b)(1) disallows claims, upon objection, of claims that are “unenforceable against the debtor…under any agreement or applicable law.” Therefore, the question becomes whether the filing of a proof of claim on a time-barred debt is a violation of the FDCPA (akin to filing a lawsuit), or whether the Bankruptcy Code provides protection for Debtors for this very type of action. The Fourth Circuit recently held in Dubois v. Atlas Acquisition, LLC, No. 15-1945 (4th Cir. August 25, 2016) that filing proofs of claim based on time-barred debts does not violate the FDCPA.