When an individual or a company files for bankruptcy, creditors who are owed money may file proofs of claim in the bankruptcy proceedings. These proofs of claim detail the money allegedly owed by the debtor to the creditor, and they are then paid, in the order required by law, by the bankruptcy trustee. However, claims made against a bankruptcy estate must comply with the Fair Debt Collection Practices Act, which regulates the conduct of debt collectors. A recent case in the Fourth Circuit looks at whether the filing of time-barred claims, when the statute of limitations has expired on the debt, is a violation of the FDCPA.
In Dubois v. Atlas Acquisitions LLC, two individuals, Ms. Adkins and Ms. Dubois, filed separate Chapter 13 bankruptcy petitions. In response, Atlas filed two different proofs of claim in each of the bankruptcy proceedings. It alleged that it was owed $575 from Adkins for two loans from payday lenders from 2009. It also filed a proof of claim for a $135 debt owed by Dubois on a payday loan from 2008. Under Maryland law, where the bankruptcy petitions were filed, both debts had already expired, since there was a three-year statute of limitations on recovering such debts. Despite the fact that the debts were technically time-barred, Atlas still filed its proofs of claim with the bankruptcy court.