Old debts in bankruptcy
Midland Funding v. Johnson
In brief
The Court ruled that filing a bankruptcy claim for a debt obviously past the legal deadline for suing does not violate the FDCPA.
- Where it stands
- Decided
Decided 5-3 · May 15, 2017 · Opinion by Justice Breyer
- What it’s about
- The Supreme Court overturned the appeals court, ruling that filing a claim in bankruptcy for an obviously time-barred debt is not a false, misleading, unfair, or unconscionable debt-collection practice under the Fair Debt Collection Practices Act (FDCPA).
- Who it affects
- The FDCPA does not bar debt collectors from filing bankruptcy claims for debts obviously past the legal deadline for suing.
Summary: written with AI from the case record.
What it's about
Midland Funding had filed a claim for Aleida Johnson’s old debt in her Chapter 13 bankruptcy.
Aleida Johnson was in a Chapter 13 bankruptcy case when Midland Funding filed its claim for the debt.
The case asked whether federal debt-collection rules apply to claims creditors file during bankruptcy.
Question presented
1. Does the Fair Debt Collection Practices Act (FDCPA) prevent creditors from filing proofs of claims on unpaid debts after the statute of limitations on those debts has run? 2. Does the U.S. Bankruptcy Code preclude applications of the Fair Debt Collection Practices Act (FDCPA) when dealing with unpaid debts after the statute of limitations on those debts has run?
What the Court decided
Holding
The filing of a proof of claim that is obviously time barred is not a false, deceptive, misleading, unfair, or unconscionable debt collection practice within the meaning of the Fair Debt Collection Practices Act. 823 F. 3d 1334, reversed.
- Result
- Reversed
The vote
From the opinions
“The Court today wrongfully holds that a debt collector that knowingly attempts to collect a time-barred debt in bankruptcy proceedings has violated neither of these prohibitions.”
What's next
The Supreme Court has issued its decision in Johnson’s case; no further Supreme Court step remains.
Documents
Opinions
Docket activity
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AI analysis generated: Case Briefing
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More questions
- What does it mean that a debt is too old to sue over?
- The legal deadline to bring a lawsuit over the debt has passed.
- What kind of bankruptcy case was Johnson’s?
- Johnson’s case was a Chapter 13 bankruptcy.
- What did Justice Sotomayor argue?
- She argued that it was unfair and unconscionable (grossly unfair) for a debt collector to seek payment in bankruptcy on a debt too old to sue over.
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.