Debt purchasers can use debtors’ bankruptcies to profit from stale, otherwise unenforceable debt. Although state statutes of limitations bar legal enforcement of this debt, predictable breakdowns of the bankruptcy process mean that the debtor might be forced to pay anyway. Courts have determined that this scheme does not violate the Fair Debt Collection Practices Act, allowing debt purchasers to continue this scheme without repercussion.
Time Bandits: The Seventh Circuit Gets It Wrong by Allowing Debt Purchasers to Escape FDCPA Liability for Filing Time-Barred Proofs of Claim in Chapter 13 Bankruptcies,
Chi.-Kent L. Rev.
Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol93/iss1/9