A Circuits Split Does the Bankruptcy Code Implicitly Repeal the FDCPA

A Circuits Split Does the Bankruptcy Code Implicitly Repeal the FDCPA

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As most observers acknowledge, the automatic stay and the discharge injunction are the two cornerstones of consumer bankruptcy law. They are, respectively, a fundamental debtor protection and a fundamental debtor objective.1 The automatic stay benefits debtors by allowing them to be free from virtually all collection efforts during the pendency of the bankruptcy case, and, having successfully completed the bankruptcy process, the discharge provides debtors with a "new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of pre-existing debt."2 Despite the protection afforded to debtors by §§362 and 524 of the Bankruptcy Code, collection efforts may still continue, either intentionally or through oversight and negligence. Enforcing a violation of the automatic stay or a violation of the discharge injunction, or both, is arguably not limited to a remedy provided by federal bankruptcy law.

As recognized by Congress more than two decades ago, debt-collection activities by third parties was, and continues to be, a substantial business that touches the lives of millions of Americans. Widespread abuse in the process of debt collection prompted Congress in 1977 to enact the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§1692-1692o, which was designed to protect consumers from an array of unfair, harassing and deceptive debt-collection practices without imposing unnecessary restrictions on ethical debt collectors.3 An apparent violation of the FDCPA can be enforced by a consumer through an action in either federal or state court.4 Significantly, a collection action violative of the FDCPA may also offend the automatic stay while a case is pending or the discharge injunction after the bankruptcy case is concluded. To that end, an important consumer bankruptcy question is whether a debtor can seek redress under both the Code and the FDCPA. As it stands, the two federal circuit courts that have addressed this issue are in direct conflict. While the Ninth Circuit Court of Appeals has found that the Code implicitly repeals the FDCPA, the Seventh Circuit Court of Appeals has held otherwise, namely that the Bankruptcy Code and the FDCPA can harmoniously coexist, thereby affording a debtor an action under both federal statutes.

Debtor Protection under §§362 and 524

Section 362 is perhaps the most fundamental provision in the Code. Not only does the automatic stay provide a debtor with breathing room by stopping virtually all collection efforts while the stay remains in place,5 it benefits creditors by establishing an orderly framework for the administration of the bankruptcy estate and prevents the piecemeal decimation of the debtor's existing assets.6 The Code provides debtors with a protection mechanism for violations of the automatic stay. Section 362(k)(1)7 provides that "an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees and, in appropriate circumstances, may recover punitive damages."8 In seeking sanctions against a creditor pursuant to §362(k), the debtor bears the burden of demonstrating that the actions taken were in violation of the automatic stay, the violation was willful and the conduct caused harm to the debtor.9 To prove a "willful" violation of the automatic stay, the debtor does not need to demonstrate that the creditor possessed the specific intent to violate the stay.10 Rather, it is sufficient for the debtor to show that the creditor was aware of the bankruptcy case and that the creditor's actions that violated the stay were intentional.11 While the imposition of actual damages is mandatory upon a finding of a willful violation of §362, an award of punitive damages rests within the discretion of the court and is ordinarily granted in circumstances where the creditor "has demonstrated egregious, vindictive or intentional misconduct."12

The second significant policy underlying bankruptcy law is the notion of a "discharge."13 The legal effect of a bankruptcy discharge is relatively straightforward with respect to individual debtors: The entry of a discharge "operates to release an individual debtor's in personam obligation to pay pre-petition indebtedness and serves as a permanent injunction against any act to collect a discharged debt."14 This freedom from personal liability for pre-petition debt is known as the proverbial "fresh start." Congress designed the permanent injunction to "'give complete effect to the discharge, to eliminate any doubt concerning the effect of the discharge as a total prohibition on debt collection efforts,' and to ensure that 'once a debt is discharged, the debtor will not be pressured in any way to repay it.'"15

Consequently, unless the individual debtor violates a proscribed form of behavior contained within the Code16 or the particular debt is of a character encompassed by §523 of the Code,17 an individual who files for bankruptcy can ordinarily obtain a discharge from the majority of his or her pre-existing debts in exchange for surrendering any existing nonexempt assets.18 Section 524(a)(2) of the Code provides that a discharge under title 11 "operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived...."19 Section 524(a)(2) was enacted to continue "post-discharge" the temporary stay imposed by §362 when a case is first commenced.20 In short, §524(a)(2) replaces the automatic stay with a permanent injunction against the enforcement of all discharged debts upon the entry of the discharge.21 The §524 injunction is intentionally broad in scope and is intended to preclude virtually all actions by a creditor, both formal and informal, to collect personally from the debtor, including telephone calls and letters.22 Accordingly, §524 protects the debtor from any act to collect a debt by a creditor whose claim has been discharged in the bankruptcy case.23

Section 524(a) does not include a specific provision setting forth available remedies for a violation of the discharge injunction. However, bankruptcy courts employ §105 of the Code24 to enforce the discharge injunction utilizing the mechanism of a civil contempt action.25 The discharge injunction created by §524(a) is an order of the bankruptcy court, and its violation is punishable by the imposition of civil sanctions.26 Courts impose sanctions for civil contempt under §105 of the Code upon a showing of willfulness; that is, a court will find a party in contempt if it knew that the discharge injunction was invoked and intended the actions that violated the injunction.27 "In a civil contempt proceeding, the state of mind with which the contemnor violated a court order is irrelevant, and therefore good faith, or the absence of an intent to violate the order, is no defense."28 Sanctions for a violation of the discharge injunction may include actual damages, attorney's fees and, in some circumstances, punitive damages.29

The Fair Debt Collection Practices Act

The FDCPA was enacted in 1977 in response to "widespread" and "serious" national concern regarding debt-collection abuses by third-party debt collectors.30 Notably, the FDCPA applies only to third-party debt collectors and not to direct collection actions by creditors with respect to their own debt.31 The FDCPA specifically defines "debt" to mean "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services that are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment."32 Stated differently, the FDCPA applies to transactions in which a consumer33 is offered the right to acquire money, property, insurance or services that are primarily for household purposes and to defer payment of the debt.34 The FDCPA, therefore, does not apply to business-related or commercial debt.

As recognized in the legislative history to the FDCPA, debt-collection abuse can occur in a variety of ways, including, but not limited to, the use of obscene or profane language; threats of violence; telephone calls at unreasonable hours; misrepresentation of a consumer's legal rights; disclosing a consumer's personal affairs to friends, neighbors or an employer; obtaining information regarding a consumer through false pretenses; impersonating public officials; and simulating the legal process.35 Accordingly, the FDCPA makes this type of conduct unlawful.36 In addition, §1692e of the FDCPA provides that a debt collector "may not use any false, deceptive or misleading representation or means in connection with the collection of any debt."37 This provision of the FDCPA contemplates that the "false representation of the character, amount or legal status of any debt" or "the threat to take any action that cannot legally be taken or that is not intended to be taken" is a violation of the statute.38 Section 1692e has particular relevance to the consumer bankruptcy setting, both during the pendency of the automatic stay and following discharge, because a dunning letter, telephone call or other com-munication with the debtor claiming the debt is "immediately due and payable" amounts to a false representation of the "legal status" of the debt. Moreover, a "threat" to take action to collect the alleged outstanding debt, which would amount to either a violation of the automatic stay or the discharge injunction, also offends §1692e of the FDCPA.

The FDCPA is a strict liability statute and therefore does not require a showing of intentional conduct on the part of a debt collector.39 Thus, even an unintentional misrepresentation of the amount of the debt violates §1692e,40 and a single violation of the FDCPA is sufficient to establish civil liability.41 In determining whether a debt collector has violated the FDCPA, the majority of courts apply an objective standard measured by how the "least sophisticated consumer" would interpret the communication at issue.42 The inquiry turns on whether an "unsophisticated consumer" would have been misled by the communication.43 The objective standard of the "least sophisticated consumer" serves dual purposes: "it (1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices."44 Because the FDCPA is aimed at curbing unscrupulous debt collectors, "there is room within the [statute] for ethical debt collectors to make occasional unavoidable errors without subjecting themselves to automatic liability."45 Specifically, under §1692k(c) of the FDCPA, a debt collector may avoid liability if it can prove by a preponderance of the evidence that any violation of the statute resulted from a "bona fide error," notwithstanding "the maintenance of procedures reasonably adopted to avoid such error."46

Finally, §1692k provides for the imposition of civil liability against any debt collector that has violated the statute. Under the FDCPA, a consumer can recover any actual damages as a result of the failure to comply with the statute, "additional damages" of not more than $1,000 per action, costs of litigation and reasonable attorney's fees.47

Circuit Split: Ninth Circuit vs. Seventh Circuit

In Walls v. Wells Fargo Bank N.A., 276 F.3d 502 (9th Cir. 2002), the Ninth Circuit Court of Appeals concluded that a debtor may not prosecute simultaneous claims against an offending creditor under both §105 of the Code and the FDCPA. In Walls, Donna Walls filed a chapter 7 petition and listed a pre-petition obligation of $118,000 owed to Wells Fargo Bank, secured by her house.48 Walls continued to make payments to Wells Fargo Bank both prior to and after her debt was discharged.49 At some point thereafter, Walls ceased making payments and Wells Fargo Bank foreclosed on the house.50 The complaint filed by Walls in district court alleged that Wells Fargo Bank failed to obtain a reaffirmation agreement after she filed for bankruptcy protection, and "that her debts were discharged, giving rise to the discharge injunction pursuant to §524(a)(2) and (c)."51 Walls maintained that the bank's conduct of soliciting and collecting payments after she received her discharge "was prohibited by §524 and was an unfair and unreasonable means of collecting a debt under the FDCPA."52 Walls theorized that since her bankruptcy case was "over and done with," she needed to rely upon the FDCPA to protect her from unfair collection practices.53

The Ninth Circuit Court of Appeals disagreed with the argument advanced by Walls. According to the Ninth Circuit, "there [was] no escaping" that Walls' FDCPA claim was in actuality an action for an alleged violation of §524.54 In so finding, the Ninth Circuit Court of Appeals concluded as follows:

To permit a simultaneous claim under the FDCPA would allow through the back door what Walls cannot accomplish through the front door—a private right of action. This would circumvent the remedial scheme of the Code under which Congress struck a balance between the interests of debtors and creditors by permitting (and limiting) debtors' remedies for violating the discharge injunction to contempt. "A mere browse through the complex, detailed and comprehensive provisions of the lengthy Bankruptcy Code... demonstrates Congress' intent to create a whole system under federal control which is designed to bring together and adjust all of the rights and duties of creditors and embarrassed debtors alike." Nothing in either Act persuades us that Congress intended to allow debtors to bypass the Code's remedial scheme when it enacted the FDCPA. While the FDCPA's purpose is to avoid bankruptcy, if bankruptcy nevertheless occurs, the debtor's protection and remedy remain under the Bankruptcy Code.55

Thus, the Ninth Circuit Court of Appeals held that a debtor's sole remedy for a violation of the discharge injunction exists under the Code, and a debtor cannot bypass the Code's "remedial scheme" by filing an action against a creditor under the FDCPA.56 The upshot of the Ninth Circuit Court of Appeals's holding in Walls is that the Bankruptcy Code implicitly repeals the FDCPA as a mechanism for debtors to curb post-discharge collection efforts for debts that have indeed been discharged.

In direct contrast to the result reached in Walls, the Seventh Circuit Court of Appeals in Randolph v. IMBS Inc., 368 F.3d 726 (7th Cir. 2004), concluded that while the Code and the FDCPA certainly overlap in some respects, the Code does not repeal the FDCPA. As such, under the Seventh Circuit Court of Appeals's approach, a debtor can conceivably bring a claim against a creditor under both the Code and the FDCPA. In Randolph, when Cheryl Alexander filed her chapter 13 petition, she owed $1,125 to her dentist.57 Alexander listed the debt on the schedule of unsecured, nonpriority claims; the dentist was notified of the filing along with the identity of Alexander's attorney.58 The dentist filed a proof of claim, and the confirmed plan contemplated that the debt be paid over time.59 Two years after plan confirmation the dentist died, and his office hired Unlimited Progress Inc. to collect on old accounts, including Alexander's.60 Unlimited Progress subsequently sent a dunning letter to Alexander, which she proceeded to ignore.61 When Unlimited Progress sent a second dunning letter to Alexander, she forwarded the letter to her attorney, who in turn contacted the debt collector and informed it about the ongoing chapter 13 proceeding.62 Unlimited Progress immediately closed its file and never again contacted Alexander. Nonetheless, Alexander filed suit under the FDCPA, claiming that Unlimited Progress falsely represented that she was required to pay the outstanding bill immediately.63 The parties consented to a decision by a magistrate judge, who concluded that §362(h)64 preempted the FDCPA because the Code occupied the field of debtor-creditor relations to the exclusion of other laws after a federal bankruptcy proceeding is commenced.65

The Seventh Circuit Court of Appeals reversed the determination of the district court and held that the Code, and in particular §362(h), does not implicitly repeal the FDCPA as a statutory mechanism by which debtors can seek redress from unlawful debt collection practices.66 When two federal statutes address the same subject in different ways, a court must inquire as to whether one statute implicitly repeals the other; to conclude that one statute implicitly repeals another, a court needs to find "an irreconcilable conflict between the statutes or a clear expressed legislative decision that one replace the other."67 Because Congress did not express a legislative intention that the Code displaces the FDCPA, the Seventh Circuit examined whether an irreconcilable conflict existed between the two statutes. In doing so, the court compared the "operational differences" between the statutes, noting that while the statutes certainly overlap, the Code and the FDCPA did not present an irreconcilable conflict.68 Therefore, according to the Seventh Circuit Court of Appeals, a debtor can seek to enforce both the FDCPA and the Code, and "any debt collector can comply with both simultaneously."69 As the Seventh Circuit stated: "Overlapping statutes do not repeal one another by implication; as long as people can comply with both, then courts can enforce both."70

The Seventh Circuit noted the following differences between the Code and the FDCPA: (1) the automatic stay can be violated by any creditor, while the FDCPA only applies to "debt collectors"; (2) §362(h) affords no defense to a creditor, while §1692k(c) provides a "bona fide error" defense for a violation of the FDCPA; (3) the Code has no cap for damages, while the FDCPA contains a $1,000 maximum "additional damages" provision per action; (4) punitive damages may be awarded by a bankruptcy court for a violation of the Code, while the FDCPA contains no provision for punitive damages; (5) the Code contains no provision for the awarding of attorneys' fees to the debtor, while §1692k(a)(3) of the FDCPA specifically provides for the recovery of attorneys' fees; and (6) the Code contains no statute of limitations for bringing an action for a violation of the stay,71 while §1692k(d) provides for a one-year statute of limitations.72

Perhaps most significant to the Seventh Circuit's conclusion is the difference in the "scienter" requirement to demonstrate a violation of each statute. While §362(h) makes liability depend on the creditor's knowledge, §1692e(2)(A) creates a strict-liability rule: "Debt collectors may not make false claims, period."73 Contrary to the position reached by the district court, the Seventh Circuit Court of Appeals determined that strict liability under §1692k(c) would not interfere with the administration of bankruptcy law established by Congress, particularly the willfulness requirement of §362(h).74

In analyzing the different scienter requirements between the Code and the FDCPA, the Seventh Circuit stated as follows:

They are simply different rules, with different requirements of proof and different remedies... To say that only the Code applies is to eliminate all control of negligent falsehoods. Permitting remedies for negligent falsehoods would not contradict any portion of the Bankruptcy Code, which therefore cannot be deemed to have repealed or curtailed §1692e(2)(A) by implication. To the extent that Walls holds other-wise, we do not follow it....75

Although the Ninth Circuit and Seventh Circuit adopted diametrically opposed holdings regarding the intersection of the Bankruptcy Code and the FDCPA, the majority of federal circuit courts have not addressed this issue. Consequently, unless and until the federal circuit courts reach a consensus or the U.S. Supreme Court elects to rule on this issue, attorneys representing consumers in all jurisdictions, with the exception of the Ninth Circuit, should contemplate whether an action under the FDCPA is another viable remedy in addition to an action under §362(h), or §§105 and 524 of the Code.



1 Curtis v. LaSalle Nat'l Bank (In re Curtis), 322 B.R. 470, 483 (Bankr. D. Mass. 2005) (citations omitted).

2 Local Loan Co. v. Hunt, 292 U.S. 234, 244-45, 54 S.Ct. 695, 699, 78 L.Ed. 1230 (1934) (citation omitted).

3 S. Rep. No. 95-382, at 1-2 (1977), as reprinted in 1977 U.S.C.CA.N. 1695, 1696.

4 See 15 U.S.C.A. §1692k(d) (West 2006).

5 With the exception of the types of matters contained within §362(b) of the Code. See, generally, 11 U.S.C.A. §362(b) (West 2006).

6 McCartney v. Integra Nat'l Bank N., 106 F.3d 506, 509 (3d Cir. 1997). See also In re Atamian, No. 04-46088, 2006 WL 1677153, *3 (Bankr. D. Mass. June 15, 2006) (citations omitted).

7 Formerly §362(h) prior to the 2005 amendments to the Bankruptcy Code.

8 See 11 U.S.C.A. §362(k)(1) (West 2006). The 2005 amendments to the Bankruptcy Code added subsection (k)(2), which provides as follows: "[i]f such violation is based on an action taken by an entity in the good-faith belief that subsection (h) applies to the debtor, the recovery under paragraph (1) of this subsection against such entity shall be limited to actual damages." 11 U.S.C.A. §362(k)(2) (West 2006).

9 Clayton v. King (In re Clayton), 235 B.R. 801, 806 (Bankr. M.D.N.C. 1998) (citations omitted).

10 Id. at 807 (citations omitted).

11 Diviney v. Bank of Texas (In re Diviney), 211 B.R. 951, 966 (Bankr. N.D. Okla. 1997).

12 In re Clayton, 235 B.R. at 810-11.

13 Jackson, Thomas H., "The Fresh-Start Policy in Bankruptcy Law," 98 Harv. L. Rev. 1393, 1393 (1985) ("Discharge, the doctrine that frees the debtor's future income from the chains of previous debts, lies at the heart of bankruptcy policy"). See also Howard, Margaret, "A Theory of Discharge in Consumer Bankruptcy," 48 Ohio St. L. J. 1047, 1047 (1987) ("That we should have some system of discharge in bankruptcy is a settled question").

14 Singer, George H., "Section 523 of the Bankruptcy Code: The Fundamentals of Nondischargeability in Consumer Bankruptcy," 71 Am. Bankr. L. J. 325, 325 (1997). Section 524 of the Bankruptcy Code describes the legal effect of a discharge in a case under Title 11, subject however, to the limitations to discharge contained in §523 of the Code. Section 524(a) of the Code provides, in pertinent part, as follows:

A discharge in a case under this title:
(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under §727, 944, 1141, 1228 or 1328 of this title, whether or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and
(3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, property of the debtor of the kind specified in §541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from discharge under §523, 1228(a)(1) or 1328(a)(1) of this title, or that would be so excepted, determined in accordance with the provisions of §§523(c) and 523(d) of this title, in a case concerning the debtor's spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.

11 U.S.C.A. §524(a) (West 2006). In turn, §727(b) of the Code provides for the legal effect of a discharge in a chapter 7 liquidation case as follows:

Except as provided in §523 of this title, a discharge under [§727(a)] discharges the debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined under §502 of this title as if such claim had arisen before the commencement of the case, whether or not a proof of claim based on any such debt or liability is filed under §501 of this title, and whether or not a claim based on any such debt or liability is allowed under §502 of this title. 11 U.S.C.A. §727(b) (West 2006).

15 Cherry v. Arendall (In re Cherry), 247 B.R. 176, 182 (Bankr. E.D. Va. 2000) (citation omitted). See also In re Arnold, 206 B.R. 560, 564 n.3 (Bankr. N.D. Ala. 1997) ("Congress enacted §524(a) to insure debtors are not pressured in any way to pay discharged debts").

16 Section 727(a) of the Code sets forth the grounds for denying a discharge to a chapter 7 debtor. Pursuant to §727(a)(2)-(7), a chapter 7 debtor will be denied a discharge if the debtor engages in the following forms of conduct:

(2) the debtor, with intent to hinder, delay or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated or concealed, or has permitted to be transferred, removed, destroyed, mutilated or concealed—

(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition;

(3) the debtor has concealed, destroyed, mutilated, falsified or failed to keep or preserve any recorded information, including books, documents, records and papers, from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or in connection with the case—

(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received or attempted to obtain money, property or advantage, or a promise of money, property or advantage, for acting or forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records and papers, relating to the debtor's property or financial affairs;

(5) the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor's liabilities;
(6) the debtor has refused, in the case—

(A) to obey any lawful order of the court, other than an order to respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify;

(7) the debtor has committed any act specified in paragraph (2), (3), (4), (5) or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider.

11 U.S.C.A. §727(a)(2)-(7) (West 2006). A bankruptcy court will also deny a discharge to a chapter 7 debtor if the debtor satisfies any of the conditions specified in §727(a)(8)-(10). See 11 U.S.C.A. §727(a)(8)-(10) (West 2006).

17 See generally 11 U.S.C.A. §523 (West 2006).

18 See Jackson, supra note 13 at 1393.

19 11 U.S.C.A. §524(a)(2) (West 2006).

20 Waswick v. Stutsman County Bank (In re Waswick), 212 B.R. 350, 352 (Bankr. D. N.D. 1997).

21 Id. (citing Siragusa v. Siragusa (In re Siragusa), 27 F.3d 406 (9th Cir. 1994)).

22 Walker v. M&M Dodge Inc. (In re Walker), 180 B.R. 834, 842 (Bankr. W.D. La. 1995).

23 4 Collier on Bankruptcy ¶524.02 (15th ed. rev. 2005).

24 Section 105(a) provides, in part: "The court may issue any order, process or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C.A. §105(a) (West 2006).

25 Parker v. Boston Univ. (In re Parker), 334 B.R. 529, 537-38 (Bankr. D. Mass. 2005) (citations omitted).

26 In re Cherry, 247 B.R. at 187.

27 Hardy v. United States, 97 F.3d 1384, 1389 (11th Cir. 1996). See also In re Riser, 298 B.R. 469, 472 (Bankr. M.D. Fla. 2003) ("A creditor may be liable for contempt under §105 if it willfully violates §524's permanent injunction").

28 In re Cherry, 247 B.R. at 187 (citing McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1949)).

29 Id. at 187. A violation of the discharge injunction must be proven by the debtor by clear and convincing evidence. See In re Parker, 334 B.R. at 538.

30 S. Rep. No. 95-382, at 2 (1977), as reprinted in 1977 U.S.C.C.A.N. 1695, 1696.

31 Cooper v. Litton Loan Servicing, 253 B.R. 286, 291 (Bankr. N.D. Fla. 2000). Section 1692a(6) defines "debt collector" in relevant part as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C.A. §1692a(6) (West 2006). Incidentally, the term "debt collector" includes attorneys "when an attorney's principle [sic] business is debt collection or who regularly collects the debts of another." Blakemore v. Pekay, 895 F. Supp. 972, 977 (N.D. Ill. 1995) (citation omitted). Further, law firms "regularly engaged in debt collection are similarly constrained by the FDCPA." Id. (citation omitted).

32 15 U.S.C.A. §1692a(5) (West 2006).

33 The FDCPA defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt." See 15 U.S.C.A. §1692a(3) (West 2006).

34 Adams v. Law Offices of Stuckert & Yates, 926 F. Supp. 521, 525 (E.D. Pa. 1996) (citation omitted).

35 S. Rep. No. 95-382, at 2 (1977), as reprinted in 1977 U.S.C.C.A.N. 1695, 1696.

36 Specifically, §1692c(a) provides as follows:

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt—

(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antemeridian and before 9 o'clock postmeridian, local time at the consumer's location;
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication.

15 U.S.C.A. §1692c(a) (West 2006). In turn, §1692d provides: A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of §1681a(f) or 1681b(3) of this title.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse or harass any person at the called number.
(6) Except as provided in §1692b of this title, the placement of telephone calls without meaningful disclosure of the caller's identity.

15 U.S.C.A. §1692d (West 2006). Moreover, §1692f provides: A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
(2) The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector's intent to deposit such check or instrument not more than 10 nor less than three business days prior to such deposit.
(3) The solicitation by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.
(4) Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.
(5) Causing charges to be made to any person for communications by concealment of the true purpose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.
(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if—

(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;
(B) there is no present intention to take possession of the property; or
(C) the property is exempt by law from such dispossession or disablement.

(7) Communicating with a consumer regarding a debt by post card.
(8) Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business. 15 U.S.C.A. §1692f (West 2006).

37 15 U.S.C.A. §1692e (West 2006).

38 See 15 U.S.C.A. §1692e(2) and (5) (West 2006).

39 Cavallaro v. Law Office of Shapiro & Kreisman, 933 F. Supp. 1148, 1153 (E.D.N.Y. 1996) (citation omitted).

40 Patzka v. Viterbo Coll., 917 F. Supp. 654, 658 (W.D. Wis. 1996) (citation omitted).

41 Cavallaro, 933 F. Supp. at 1153 (citation omitted).

42 Id. (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993). See also Beattie v. D.M. Collections Inc., 754 F. Supp. 383, 392 (D. Del. 1991) ("in determining whether a statement is false, deceptive or misleading so as to constitute a violation of any of the provisions of 15 U.S.C.A. §1692e, the court should apply the standard of the 'least sophisticated consumer'") (citations omitted).

43 Beattie, 754 F. Supp. at 392.

44 Clomon, 988 F.2d at 1320 (2d Cir. 1993).

45 Beattie, 754 F. Supp. at 392.

46 Patzka, 917 F. Supp. at 658-59. Section 1692k(c) provides as follows: "A debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error." 15 U.S.C.A. §1692k(c) (West 2006).

47 See 15 U.S.C.A. §1692k(a) (West 2006).

48 276 F.3d at 505.

49 Id. Walls exercised the ability to "ride through" her obligations with Wells Fargo Bank.

50 Id.

51 Id.

52 Id. Walls also sought a legal determination that §524 creates a private right of action independent of any contempt proceeding brought under §105 in bankruptcy court. Simply put, the Ninth Circuit Court of Appeals concluded that no such private right of action exists.

53 Id. at 510.

54 Id.

55 Id. (citations omitted).

56 Id.

57 368 F.3d at 728.

58 Id.

59 Id.

60 Id.

61 Id.

62 Id.

63 Id. Alexander also claimed that Unlimited Progress violated the FDCPA by communicating directly with her, even though she was represented by counsel.

64 The matter was decided prior to the effective date of the 2005 amendments to the Bankruptcy Code.

65 368 F.3d at 729.

66 Id. at 730.

67 Id.

68 Id.

69 Id.

70 Id. at 731.

71 Subject, of course, to a defense of laches.

72 See 368 F.3d at 730.

73 Id.

74 Id.

75 Id. at 732-33.

Journal Date: 
Sunday, October 1, 2006