Monday, the U.S. Supreme Court ruled that debt collectors can use bankruptcy proceedings to collect debts that have expired under state statutes of limitations without fear of reprisal under the U.S. Fair Debt Collection Practices Act.
The court found that companies will not be held liable when they file claims on past debt, giving creditors the green light to pursue debtors for age-old debt that is not required to be paid back under state law.
Without the ability to hold companies accountable for trying (and often times succeeding) to recoup debt beyond the statute of limitations, debt collectors have no reason not to attempt to collect debt that is not legally recoverable under state law.
Those who oppose the ruling warn that professional debt collectors are notorious for buying old debt, filing claims to collect it, all the while hoping no one will notice the debt is too old to be enforced. For individuals and couples considering bankruptcy who may have old debts, remember… if debtors or their attorneys don’t object, claims can be made against them when they have entered bankruptcy even when there is no legal basis for the debt to be collected. It is important to know the laws in your state so you can avoid this unfair and unconscionable practice.
If you have questions regarding bankruptcy protection, contact the Law Offices of Charles E. Covey for assistance. Our Peoria Illinois bankruptcy team can help you decide if Chapter 7 or Chapter 13 bankruptcy is the right solution for you. Call for a free consultation today 309-674-8125.