Statute of Limitations – Law Office of Rick Morin, PC

You Might Owe LVNV Funding Money

Never heard of LVNV Funding? Confused because you have never taken out a loan from LVNV Funding? That does not mean that you do not legally owe them money.

Debt collectors such as LVNV Funding buy up bad debt from other creditors. Once LVNV buys that debt, they can legally collect it from you. This is despite the fact that you don’t have any formal relationship with the company.

Don’t Assume That You are Legally Required to Pay LVNV Funding

Some debt collectors purchase accounts that are too old to legally collect. These debts are past the “statute of limitations.”

However, a debt collector can still legally ask that you voluntarily pay an old debt. The statute of limitations just prevents the collector from legally enforcing the debt in court.

Some people make the mistake of voluntarily paying a time-barred debt. This is a bad idea! Never pay a debt that the creditor cannot legally enforce.

Sued by LVNV Funding? Don’t Panic!

Sometimes debt collectors such as LVNV Funding will file a lawsuit. They are seeking to enforce their debt against the debtor. Ultimately, LVNV Funding wants to obtain a judgment.

With a judgment, LVNF Funding can garnish wages, record liens against property, and levy bank accounts.

Some people panic once LVNV files a lawsuit. Don’t do that! Hiring a lawyer to fight LVNV Funding in court can help prevent judgments, garnishments, and foreclosures. Bankruptcy might also be a good option.

Don’t delay any longer. If LVNV Funding is suing you or already has a judgment, please call my office at (916) 333-2222 to discuss your options.

It is not often that the United States Supreme Court decides a bankrutpcy related case. Yesterday, the Supreme Court issued a ruling in an important cases that bankruptcy practitioners have been watching for some time. In fact, the case of Midland Funding v. Johnson decides an important question for Chapter 13 lawyers nationwide.

Not All Claims in Chapter 13 Are Valid

A debtor in Chapter 13 is repaying some or all of their debts over time. The Chapter 13 Trustee is responsible for distributing funds to each creditor. Only creditors that file a “proof of claim” will receive distributions from the Trustee.

Believe it or not, creditors often file invalid claims in Chapter 13 cases. These creditors hope that nobody notices the defects in their claims. A party to a bankruptcy can object to time barred claims. If not, the Chapter 13 trustee will pay the claim.

Statute of Limitations and Chapter 13 Claims

The most common defect in a Chapter 13 claim is something called the statute of limitations. The statute of limitations is an absolute defense to the enforceability of a debt in court. Basically, a creditor cannot enforce a debt in court that is too old.

Most consumer debts are governed by a four year statute of limitations in California. That means that a creditor must sue a debtor four years after the debtor defaults on the debt. A creditor that waits too long waives its right to collect the debt in court.

The same statute of limitations defense applies in bankruptcy as well. A debtor can object to a Chapter 13 claim that is too old under the applicable statue of limitations. Again, this does not happen automatically. A debtor, trustee, or creditor must take affirmative action to object to invalid claims in bankruptcy.

Midland Funding v. Johnson

The United States Supreme Court answered a very important question in Chapter 13 cases. Is the filing of a proof of claim that is obviously time barred a false, deceptive, misleading, unfair, or unconscionable debt collection practice within the meaning of the Fair Debt Collection Practices Act (“FDCPA”)?

Midland Funding presented a obviously time barred debt in the Johnson bankruptcy case. Johnson turned around and sued Midland Funding for a violation of the FDCPA. Courts throughout the country were split on whether this type of lawsuit by a debtor was allowed.

The Supreme Court ruled “no.” This means that a debtor can still object to time barred debts. But debtors cannot sue creditors under the FDCPA for filing time barred claims.

There are other procedural tools that debtors can use to fight back against creditors trying to sneak time barred claims into Chapter 13 cases.

Are you considering Chapter 13 bankruptcy? Contact my office at (916) 333-2222 to discuss your bankruptcy options.

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