• Maryland Bankruptcy Court Issues FDCPA Decision
  • April 24, 2018 | Author: Christopher R. Rahl
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • A recent decision of the United States Bankruptcy Court for the District of Maryland dismissed claims brought by a debtor against unlicensed debt collectors who filed claims in the debtor’s Chapter 13 case. The debtor filed a three count complaint against the debt collectors. The first two counts sought damages for violation of the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act. The third count sought to disallow the debt collectors’ claims on the basis of their unenforceability under Maryland law. The court granted a motion to dismiss the first two counts on the basis that the Bankruptcy Code permits the filing of the claims and preempts state law to the extent state law prohibits the filing of the claims. The court did not dismiss the third count as the claims are subject to the bankruptcy claims allowance process and can be disallowed if they are unenforceable under state law. The decision is based in substantial part on the Supreme Court’s decision in Midland Funding, LLC v. Johnson (see our June 2017 Maryland Legal Alert), which held that creditors holding claims barred by limitations do not violate the federal Fair Debt Collection Practices Act by filing the claims in a bankruptcy case.