Private Remedies and Access to Justice in a Post-Midland World

Abstract

Over the past several years, chapter 13 debtors have used the Fair Debt Collection Practices Act (FDCPA) as a tool to challenge debt buyers who file massive numbers of proofs of claim for debt for which the statute of limitations has run. In Midland Funding v. Johnson, the Supreme Court held that filing a proof of claim for time-barred debt does not violate the FDCPA. This decision put an end to the spate of FDCPA litigation and, in so doing, placed the burden of policing stale debt claims squarely on the shoulders of chapter 13 trustees.

In this Essay, we question whether this state of affairs is in line with the balance of powers contemplated by the Bankruptcy Code or feasible in light of the realities of bankruptcy practice. We also explore alternatives to FDCPA litigation that might provide a more viable response to this problem. Finally, we consider what the rise and fall of these FDCPA claims might tell us about the role private litigation can play in improving access to justice in bankruptcy.

Keywords: Consumer Bankruptcy, Midland Funding, Private Enforcement, Chapter 13, FDCPA, Proof Of Claim, Consumer Finance, CFPB