Is it illegal to send out collection letters for debts that are subject to a statute-of-limitations defense? As Seyfarth Shaw partner Scott M. Pearson and associate Carrie P. Price explain, the answer depends on which circuit court you ask.
The attorneys say the Seventh U.S. Circuit Court of Appeals recently reversed dismissals of two federal Fair Debt Collection Practices Act claims (McMahon v. LVNV Funding and Delgado v. Capital Mgt. Servs.) challenging letters offering to “settle” time-barred debts. They say the court makes it clear that while not “automatically improper,” such offers might wrongly imply the debt is legally enforceable.
