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Justices Spare Collectors That Pursue Stale Debt In Bankruptcy

By Alex Wolf

Law360, New York (May 15, 2017, 10:41 AM EDT) — Debt collectors that knowingly pursue stale debt in bankruptcy proceedings do not run the risk of facing potential consumer protection lawsuits, the US Supreme Court held Monday, overturning an Eleventh Circuit decision that put collectors on the hook for filing bad faith claims against a debtor.

The high court ruled in a 5-3 decision written by Justice Stephen G. Breyer that the Eleventh Circuit erred last year when it found that Midland Funding LLC, one of the nation’s largest purchasers of unpaid debt, was potentially liable…

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