The plaintiff filed for Chapter 7 bankruptcy over medical debts which cleared him from liability. More than 400,000 people file for bankruptcy each year, and medical debt is the leading type of claim. However, in this case the defendant continued to make unlawful collection attempts, violating federal and state statutes.
The FDCPA and North Carolina Collection Agency Act (NCCAA) state collectors cannot attempt to collect debts cleared under bankruptcy discharge. North Carolina differs slightly from most states in the way is appoints case trustees (someone to oversee the process). The difference is that the bankruptcy courts direclty appoint an overseerinstead of the US trustee appointing an impartial third party. However, the provisions of bankruptcy remain the same, and eliminated debts (such as those discharged by Chapter 7 bankruptcy) cannot be collected upon.
Our attorneys worked alongside Gary Jackson and Christopher Bagley of James Scott Farrin on this FDCPA class action. Overall, the firms’ investigation uncovered 12,000 potential victims of unlawful collection between 2012-2019. Attorneys were subsequently able to identify class members eligible to recover damages from the settlement.