August 22, 2014 Newsletter
Time Is Ticking On Your Delinquent Accounts
In a recent court of appeals case Crawford v LVNF Funding, LLC, the Eleventh Circuit became the first federal circuit court to rule that filing a proof of claim on a time barred debt (past the statute of limitations), in a bankruptcy case, is a violation of the Fair Debt Collection Practices Act (FDCPA).
Every state has their own laws regarding statute of limitations and it is important to be educated as to what your state law is on the matter.
In the case above, the statute of limitations had run out on the plaintiffs debt. When the plaintiff went to file relief under bankruptcy, the current owner of that debt filed a proof of claim with no objections from the trustee or the debtor, until four years later. At that time, the debtor filed an adversary complaint in the bankruptcy case stating that the filing of the proof of claim on that debt violated the FDCPA. In this case, the courts held that filing a proof of claim on a stale debt created a misleading impression that the debt collector can legally enforce the debt and ruled in the plaintiff’s favor.
Some states do allow collection activities on time barred debs but cannot enforce any legal remedies on the debt. As our blog, The Meter is Running, addresses, Wisconsin law states that once the statute of limitations has expired, no further collection activity can be done.
To see how long you have to collect on a debt from Wisconsin as well as the rest of the United States, for our out-of-state clients, click here.
This information is not intended to be, nor is it, legal advice. It is intended for informational purposes only. We make no warranty, express or implied, as to the accuracy or reliability of the information contained in the above. These communications do not establish an attorney-client relationship between us. You must retain your own attorney to receive legal advice.
Study Shows Health of Economy Relies on Consumer Debt Collection Recovery
A study conducted in the spring of 2014 by Ernst & Young and ACA International revealed that the collection of consumer debt has a significant effect on national and state economies in the United States and sheds a positive light on the debt collection industry.
A few of the key findings from the study include recovering assets, job creation and giving back.
Rightfully owed money in the amount of $55.2 billion was recovered for creditor and government clients in 2013. By being able to collect on that debt, the costs of goods and services can be kept lower and also return a savings back to households.
In 2013, the debt collection industry employed more than 136,000 people and influenced the creation of more than 230,000 jobs.
Also, third-party collection agencies along with their employees contributed $130.5 million and volunteered about 1.9 million hours to charitable causes. Finance System of Green Bay, Inc. gives annually to Cerebral Palsy, Inc., the Community Health Care Foundation and the Shopko Golf Classic to help fund the Shopko Foundation. We also participate in other fundraising and charitable causes such as the Boys & Girls Club of Green Bay and the Salvation Army’s Adopt-A-Family program, every year.
Wisconsin Small Claims Judgment Interest Update
Due to the law passed in December, 2011, we are updating you on what the current interest rate for small claims judgments is. The interest rate based on the equation prime plus one stays current at 4.25% until December 31, 2014. Please update your records for future small claims actions you may take.
Upcoming Appearances
Apartment Association of Southeastern Wisconsin Trade Show 2014
September 19 at the Potawatomi Hotel and Casino – Milwaukee
AAHAM Fall 2014 Conference
October 2-3 at the Metropolis Resort and Conference Center – Eau Claire
WSTA Fall Conference
October 6-8 at the La Crosse Center – La Crosse
HFMA-Wisconsin Chapter Winter Conference
January 21-23, 2015 at The Wilderness – Wisconsin Dells
