Supreme Court Decisions Regarding the FDCPA: Part 2 of 2

July 7, 2017

What is a Right without a Remedy?

The United States Supreme Court reversed the 11th Circuit Court of Appeals in another case concerning the Fair Debt Collection Practices Act (FDCPA) in Midland Funding, LLC v. Johnson, Case No. 16-0348. 

Timeline of events:

  • In March of 2014, an individual debtor filed for Chapter 13 Bankruptcy in the Southern District of Alabama.  A creditor, Midland Funding, filed a Proof of Claim in the debtor’s Chapter 13 case with a written statement that the debt in question ($1,879.71 of credit card debt) was more than 10 years old.  The debtor objected using the statute of limitations as an affirmative defense.  In Alabama the statute of limitations on collection of debt is six years.  Midland did not file a response.  As such, the bankruptcy court disallowed Midland’s Claim.
  • The debtor then sued Midland Funding in District Court for violating the FDCPA by attempting to collect on an expired debt.  The District Court dismissed the case, concluding the FDCPA did not apply.
  • The 11th Circuit Appellate Court reversed the District Court.  Midland Funding then proceeded to file a petition for certiorari, or a petition for review, asking the Supreme Court to weigh in on this question:

“Whether the conduct at issue here is ‘false,’ ‘deceptive,’ ‘misleading,’ ‘unconscionable,’ or ‘unfair’ within the meaning of the FDCPA.”

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The United States Supreme Court and the FDCPA: Who Is a Debt Collector?

June 20, 2016

Semantics!  Sometimes it boils down to just one word.  Such was the focus of the very first Opinion to come from the newly appointed Justice Neil Gorsuch in the case Henson v. Santander.  After a dense grammatical discussion of the word “owed” in the context of the Fair Debt Collection Practices Act (“FDCPA”), Justice Gorsuch affirmed the decisions of the District court and the Fourth Circuit Court of Appeals concluding that defendant, Santander, does not qualify as a debt collector under the definition of the FDCPA.

Besides the petitioners’ creative account of past vs. present participles and how that can affect the intended meaning of the FDCPA, Justice Gorsuch’s Opinion looks at a few other angles in attempt to answer the ultimate question: Who qualifies as a “debt collector?”

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Asset Protection, Attorney-Client Privilege, Pre/Post Wrongdoing

June 5, 2017

“The court is loath to invade the attorney-client privilege except upon the most persuasive prima facie presentation, as the Trustee has made in support of his Motion”

A recent decision in the Western District of Michigan Bankruptcy Court, allows for a Trustee to subpoena a debtor’s Attorney for correspondence that the non-moving party argues is protected by attorney-client privilege.  In the matter of In re Rosich, Adversary Case Number 15-80203, the Court came to this careful determination by citing the crime-fraud exception and using a two-part test to show why attorney-client privilege does not apply in this case.  Within this decision, the Court did not simply open the flood gates; instead they applied an important distinction between pre/post wrongdoing to limit the scope of the subpoena. 

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Ninth Circuit BAP rules in Student Debtor’s Favor on Student Loan Debt case

May 21, 2017

Last week we featured a blog entitled, “What to do with Student loan Debt? The Debate Continues.”  In that blog we discussed an important ruling by the 11th Circuit Court that allowed a debtor to discharge $112,000.00 in student loan debt through her individual bankruptcy.

Under a recent ruling by the 9th Circuit Bankruptcy Appellate Panel (BAP), a debtor may be able to discharge over $70,000.00 in private student loans. 

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West Michigan Beer and Craft Breweries – Reorganization and Bankruptcy Options

May 11, 2017

It’s happening all over.  The economy is steady yet, in the first quarter of 2017 alone we’ve seen more major retail outlets across the U.S. file for Chapter 11 Bankruptcy than in the whole of 2016.  In the age of being able to order everything to your doorstep, physical retail outlets across the United States are being forced to re-imagine their industry; to pivot to survive. 

Some of this doom-day buzz has begun to circulate in regards to the Craft Beer Industry; an industry that boosted the Michigan economy by $1.85 billion in 2014 according to a report released by Denver-based Brewers Association, an industry trade group. 

Today, the media conversation looks a little different:

                “Is the craft beer market in Grand Rapids saturated?”

                “Concern over craft brewery saturation in West Michigan emerges among lenders,”

                ”Executive roundtable: Craft beverage makers struggle through internal divisions, market forces, threats”

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What to do with Student Loan Debt in Bankruptcy? The Debate Continues

May 8, 2017

“Thus, even if the court concludes that a debtor has acted recklessly or foolishly in accumulating student debt, that does not play into an analysis under the second prong.”

In an important decision last week, the 11th Circuit Court vacated and remanded Alabama District Court Judge W. Keith Watkins’ judgment concerning a single mother’s $112,000.00, $915/month student loan debt.

Through her individual bankruptcy proceedings, the debtor’s student loan debt was considered discharged under Section 523(a)(8) of the Bankruptcy Code.  This section of the code is referred to as “undue hardship,” it reads:

“(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— ….(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents.”


This means, it was the opinion of the bankruptcy court that the continued, required payment of $915/month for 15 years was sure to impose an “undue hardship” on the debtor and her family.  On appeal, district court Judge Watkins reversed this decision, once again binding the debtor to the full student loan debt amount. 

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So, Your State Income Tax Refund Was Garnished…

April 28, 2017

This blog is about State income tax refund garnishments, not federal.  Your federal income tax refund can typically only be garnished for federal or related government obligations.  If you owed the IRS, child support back pay, or federal student loans, your federal income tax refund can potentially be garnished. 

Further, if your wage or bank account has been garnished read our standard Garnishment Blog here or, watch a short YouTube video about how the garnishment process works here. 


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Michigan Driver Responsibility Program Phase Out and Bankruptcy

April 10, 2017

The State of Michigan’s Driver Responsibility Program has been in existence for a number of years, and can result in a substantial amount of fees owed to the State. However, the State has begun a phase out of the Driver Responsibility programs and related fees.  It is important to note that not all driver responsibility fees will be affected by this phase out.  If your fees do not fall within this limited phase out window, it may still be beneficial to consider a bankruptcy to discharge the obligation and reinstate your license. 

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