Consumer Can Enforce Bankruptcy Discharge Under FDCPA, Second Circuit Rules

Today the Second Circuit Court of Appeals ruled that consumers can enforce bankruptcy discharge orders in small claims courts under the FDCPA.

Read the full Second Circuit opinion in Garfield v. Ocwen.

The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (“FDCPA”) generally makes it illegal for a collector to call a consumer to collect a debt the consumer doesn’t owe.

Most states allow consumers to stop collection calls after bankruptcy simply by filing a small claims court complaint under the FDCPA.

Stopping Calls and Fixing Credit After Bankruptcy

The Second Circuit’s ruling applies to consumers in New York, Connecticut, and Vermont.

Read the Seventh Circuit’s opinion in Randolph v. IMBS, which allows consumers in Illinois, Indiana, and Wisconsin to enforce the bankruptcy discharge under the FDCPA.

Read the Third Circuit’s opinion in Simon v. FIA Card Services, which allows consumers in New Jersey, Pennsylvania, and Delaware to enforce the bankruptcy discharge under the FDCPA.

Unfortunately for consumers in the Ninth Circuit (which includes Oregon, Washington, and California), stopping calls after bankruptcy almost always means hiring attorneys to re-open their bankruptcy cases.

Read the Ninth Circuit’s opinion in Walls v. Wells Fargo, which requires consumers on the West Coast to enforce their discharges by filing motions for contempt in bankruptcy court.​

Consumer Reporting Fairness Act

In July 2015 Oregon Senator Jeff Merkley co-sponsored a bill that would essentially overrule Walls v. Wells Fargo, at least in the post-bankruptcy credit reporting context. The bill (Senate Bill 1773) titled the Consumer Reporting Fairness Act remains pending in the Senate Judiciary Committee.

Michael Fuller is a partner at Olsen Daines in Portland, Oregon and an adjunct professor of consumer law at Lewis & Clark Law School.

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