## Facts

- Stanley Crawford owed $2,037.99 on a consumer furniture account that was charged off in 1999.
- An LVNV affiliate acquired the account in 2001; the last transaction date was October 26, 2001.
- Under Alabama’s three-year statute of limitations, the debt became unenforceable by October 2004.
- Crawford filed a Chapter 13 bankruptcy petition in the Middle District of Alabama on February 2, 2008.
- LVNV filed a proof of claim in the Chapter 13 case seeking payment on the account even though the limitations period had expired years earlier.
- The proof of claim listed dates showing on its face that the debt was time-barred.
- Crawford brought an adversary proceeding alleging LVNV routinely filed proofs of claim on stale debts and that this conduct violated the Fair Debt Collection Practices Act (FDCPA), including 15 U.S.C. §§ 1692e and 1692f.
- The bankruptcy court dismissed the FDCPA claims, and the district court affirmed; Crawford appealed.

## Issues

1. Whether a debt collector’s filing of a proof of claim in a Chapter 13 case on a facially time-barred debt can violate the FDCPA.
2. Whether such a filing can be “false, deceptive, or misleading” under 15 U.S.C. § 1692e or “unfair or unconscionable” under 15 U.S.C. § 1692f.
3. Whether the Bankruptcy Code’s claims-allowance process displaces or otherwise precludes FDCPA liability for filing a stale proof of claim.

## Decision

- The Eleventh Circuit reversed the dismissal and remanded for further proceedings.
- The court held that filing a proof of claim on a facially time-barred debt in Chapter 13 may violate the FDCPA.
- The court concluded the FDCPA and the Bankruptcy Code are not in irreconcilable conflict and can operate together.
- The court reasoned that the practice can mislead or unfairly pressure debtors because stale claims may be allowed and paid if no objection is made, despite being subject to a limitations defense.

## Legal Principles

- The FDCPA applies to debt-collection conduct occurring in a bankruptcy case; bankruptcy forum alone does not immunize a debt collector.
- Under § 1692e, conduct may be actionable if it is materially misleading to the “least sophisticated consumer,” including communications that are literally accurate but misleading in context.
- Under § 1692f, attempting to obtain payment through filing a proof of claim on a debt that is facially time-barred can qualify as an unfair or unconscionable collection method.
- The Bankruptcy Code permits filing “claims” that may be subject to defenses, but a limitations defense typically requires an objection; the risk that stale claims will go unchallenged is relevant to FDCPA unfairness and deception analysis.
- Bankruptcy remedies for improper claims are not necessarily exclusive; absent clear statutory command, FDCPA remedies may be cumulative with bankruptcy procedures.

## Conclusion

The Eleventh Circuit held that a debt collector’s filing of a Chapter 13 proof of claim on a debt that is time-barred on its face can constitute misleading or unfair debt-collection conduct under the FDCPA, and it allowed the debtor’s FDCPA action to proceed despite the availability of bankruptcy claims objections.


Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014)