Court Opinion

ID: 4028562
Source: CourtListenerOpinion
Date Created: 2016-08-25 19:00:48.083498+00
Date Added: 2024-06-11T14:49:49.865234
License: Public Domain

PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                             No. 15-1945

In Re: ERIC DUBOIS,

                 Debtor.

----------------------

CHAILLE DUBOIS, f/k/a Chaille Gaines, f/k/a Candace DuBois,
f/k/a Candace Gaines, f/k/a Candi Gaines, f/k/a Candi
DuBois; KIMBERLY ADKINS,

                 Plaintiffs - Appellants,

           v.

ATLAS ACQUISITIONS LLC,

                 Defendant – Appellee,

           and

TIMOTHY P. BRANIGAN; NANCY SPENCER GRISBY,

                 Trustees.

Appeal from the United States Bankruptcy Court for the District
of Maryland, at Greenbelt.     Thomas J. Catliota, Bankruptcy
Judge. (15-00110; 14-28589)

Argued:   May 10, 2016                      Decided:   August 25, 2016

Before DIAZ, FLOYD, and THACKER, Circuit Judges.
Affirmed by published opinion. Judge Floyd wrote the majority
opinion, in which Judge Thacker joined.   Judge Diaz wrote a
dissenting opinion.

ARGUED: Morgan William Fisher, LAW OFFICES OF MORGAN FISHER LLC,
Annapolis, Maryland, for Appellants.     Donald S. Maurice, Jr.,
MAURICE WUTSCHER, LLP, Flemington, New Jersey, for Appellee. ON
BRIEF: Courtney L. Weiner, LAW OFFICES OF MORGAN FISHER LLC,
Washington, D.C., for Appellants.    Alan C. Hochheiser, BUCKLEY
KING, LPA, Cleveland, Ohio, for Appellee.

                               2
FLOYD, Circuit Judge:

     Appellants   Kimberly   Adkins   and   Chaille    Dubois   filed

separate Chapter 13 bankruptcy petitions in the Bankruptcy Court

for the District of Maryland.     Appellee Atlas Acquisitions LLC

(Atlas) filed proofs of claim in their bankruptcy cases based on

debts that were barred by Maryland’s statute of limitations. 1

The issue on appeal is whether Atlas violated the Fair Debt

Collection Practices Act (FDCPA) by filing proofs of claim based

on time-barred debts.    We hold that Atlas’s conduct does not

violate the FDCPA, and affirm the bankruptcy court’s dismissal

of Appellants’ FDCPA claims and related state law claim.

                                I.

     The facts of Appellants’ cases are similar.         Adkins filed

for Chapter 13 bankruptcy on August 29, 2014.         Atlas filed two

proofs of claim in her case.    The first proof of claim indicated

that Adkins owed Atlas $184.62 based on a loan that originated

with payday lender Check N Go and that Atlas purchased from

Elite Enterprise Services, LLC (Elite Enterprise) on September

     1 “A proof of claim is a form filed by a creditor in a
bankruptcy proceeding that states the amount the debtor owes to
the creditor and the reason for the debt.”        Covert v. LVNV
Funding, LLC, 779 F.3d 242, 244 n.1 (4th Cir. 2015).

                                 3
15, 2014. 2         The proof of claim identified the last transaction

date on the account as May 19, 2009.                             Atlas’s second proof of

claim       was   for    $390.00    based     on      a    loan    that    originated        with

payday      lender       Impact   Cash    USA       and    that    Atlas    purchased        from

Elite       Enterprise      on    November      18,       2014.     The     proof      of   claim

identified         the     last    transaction            date     on     that    account      as

September         10,    2009.     It    is   undisputed          that     both    debts     were

beyond Maryland’s three-year statute of limitations when Atlas

purchased         and     attempted      to     assert       the        debts     in   Adkins’s

bankruptcy case.            See Md. Code Ann., Cts. & Jud. Proc. § 5-101.

Adkins neither listed the debts on her bankruptcy schedules nor

sent a notice of bankruptcy to Atlas.

        Dubois filed for Chapter 13 bankruptcy on December 6, 2014.

Atlas filed a proof of claim for $135.00 based on a loan that

originated with payday lender Iadvance and that Atlas purchased

from Elite Enterprise on January 5, 2015.                               The proof of claim

identified the last transaction date on the account as October

18, 2008.           It is undisputed that this debt was also beyond

        2
       Atlas asks the Court to strike any allegation that the
loans in this appeal originated with payday lenders.    However,
the proofs of claim attached to Appellants’ complaints indicate
that Atlas itself designated the debts “payday.”    See J.A. 55,
140. Accordingly, we find this fact sufficiently alleged. See
Goines v. Valley Cmty. Servs. Bd., No. 15-1589, ---F.3d---, 2016
WL 2621262, at *2 (4th Cir. May 9, 2016) (explaining that on
motion to dismiss, courts may consider documents attached to
complaint as exhibits).

                                                4
Maryland’s       statute        of    limitations             when    Atlas     purchased        and

attempted        to    assert        the    debt       in    Dubois’s       bankruptcy      case.

Dubois did not list the debt on her bankruptcy schedules nor did

she send a notice of bankruptcy to Atlas.

        Adkins        and    Dubois        filed       separate       adversary       complaints

against Atlas.              Both objected to Atlas’s claims as being time-

barred    and     further       alleged         that    Atlas      violated     the      FDCPA   by

filing    proofs        of    claim        on   stale        debts.         Appellants     sought

disallowance of Atlas’s claims as well as damages, attorney’s

fees, and costs under the FDCPA. 3

     Atlas conceded that its claims were based on time-barred

debts    and     stipulated          to    their       disallowance.           However,     Atlas

moved to dismiss Appellants’ FDCPA claims under Federal Rule of

Civil Procedure 12(b)(6) for failure to state a claim upon which

relief     could       be     granted.           See        Fed.   R.      Bankr.   P.    7012(b)

(incorporating Rule 12(b)(6) into adversary proceedings).                                   After

hearing     consolidated             oral       arguments,           the    bankruptcy      court

concluded that filing a proof of claim does not constitute debt

collection activity within the meaning of the FDCPA and granted

Atlas’s motion to dismiss.                      Pursuant 28 U.S.C. § 158(d)(2), we

     3  Dubois additionally alleged that Atlas violated the
Maryland Consumer Debt Collection Act (MCDCA).   Md. Code Ann.,
Com. Law § 14-201, et seq. The parties do not analyze the MCDCA
separately from the FDCPA. Accordingly, neither do we.

                                                   5
permitted Appellants to appeal the bankruptcy court’s decision

directly    to    this    Court.     We       review    the   bankruptcy   court’s

dismissal of Appellants’ claims under Rule 12(b)(6) de novo.

See, e.g., In re Mwangi, 764 F.3d 1168, 1173 (9th Cir. 2014); In

re McKenzie, 716 F.3d 404, 412 (6th Cir. 2013).

                                         II.

     Before addressing the substance of Appellants’ claims, we

provide a brief overview of the relevant statutes in this case:

the Bankruptcy Code (the “Code”) and the FDCPA.

                                          A.

     “The principal purpose of the Bankruptcy Code is to grant a

‘fresh start’ to the ‘honest but unfortunate debtor.’”                     Marrama

v. Citizens Bank, 549 U.S. 365, 367 (2007) (quoting Grogan v.

Garner, 498 U.S. 279, 286, 287 (1991)).                 Through bankruptcy, the

debtor’s assets are collected for equitable distribution among

creditors and his remaining debts are discharged.                  See Covert v.

LVNV Funding, LLC, 779 F.3d 242, 248 (4th Cir. 2015); In re

Jahrling,   816 F.3d 921,    924    (7th   Cir.    2016).     A   bankruptcy

debtor must file with the bankruptcy court a list of creditors,

a schedule of assets and liabilities, and a statement of the

debtor’s financial affairs.              11 U.S.C. § 521(a)(1).            "[B]eing

all-inclusive on the schedules is consistent with the Code’s

                                          6
principle of honest and full disclosure.”                 In re Vaughn, 536
B.R. 670, 676 (Bankr. D.S.C. 2015).             Scheduling a debt notifies

the creditor of the bankruptcy and of the creditor's opportunity

to file a proof of claim asserting a right to payment against

the debtor’s estate.     See id. at 679; 11 U.S.C. § 501(a).

     The bankruptcy court may “allow” or “disallow” claims from

sharing in the distribution of the bankruptcy estate.                11 U.S.C.

§ 502.   In Chapter 13 proceedings, allowed claims are typically

paid, either in whole or in part, out of the debtor’s future

earnings pursuant to a repayment plan proposed by the debtor and

confirmed by the bankruptcy court.             See id. § 1322(a)(1); 4-501

Collier on Bankruptcy ¶ 501.01 (Collier).                 Upon completion of

all payments under the plan, the bankruptcy court “grant[s] the

debtor a discharge of all debts provided for by the plan or

disallowed.”    11 U.S.C. § 1328(a).              Thus, at the end of the

process the debtor receives the “fresh start” contemplated by

the Bankruptcy Code.

                                       B.

     Congress   enacted    the       FDCPA   to    eliminate     abusive     debt

collection   practices    and   to    ensure      that   debt   collectors   who

refrain from such practices are not competitively disadvantaged.

15 U.S.C. § 1692(a), (e).        The FDCPA regulates the conduct of

“debt collectors,” defined to include “any person who uses any

                                       7
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.”        Id. § 1692a(6).          Among other things, the FDCPA

prohibits debt collectors from using “any false, deceptive, or

misleading       representation       or   means    in     connection         with     the

collection        of   any     debt,”      and     from        using     “unfair        or

unconscionable means to collect or attempt to collect any debt.”

Id. §§ 1692e-1692f.           The statute provides a non-exhaustive list

of conduct that is deceptive or unfair (e.g., falsely implying

that the debt collector is affiliated with the United States,

id. § 1692e(1)).            Debt   collectors     who    violate       the    FDCPA   are

liable for actual damages, statutory damages of up to $1,000,

and attorney’s fees and costs.             See id. § 1692k(a).

                                           C.

     Federal courts have consistently held that a debt collector

violates the FDCPA by filing a lawsuit or threatening to file a

lawsuit to collect a time-barred debt.                     See Crawford v. LVNV

Funding,        LLC,   758 F.3d 1254,      1259-60       (11th     Cir.        2014)

(collecting       cases),     cert.   denied,      135    S.    Ct.     1844    (2015).

Appellants contend that filing a proof of claim on a time-barred

debt in a bankruptcy proceeding similarly violates the FDCPA.

                                           8
Atlas    counters     that          filing    a       proof        of    claim     is     not       debt

collection activity and is therefore not subject to the FDCPA.

Alas further argues that, even if the FDCPA applies, filing a

proof   of   claim    on        a    time-barred            debt    does     not    violate         its

provisions.       These arguments are addressed in turn.

                                              III.

      Atlas does not dispute that it is a debt collector but

argues that filing a proof of claim does not constitute debt

collection    activity          regulated         by    the        FDCPA.         See    15     U.S.C.

§ 1692e (prohibiting deceptive or misleading representations “in

connection    with        the       collection         of    any        debt”);    id.     §    1692f

(prohibiting       unfair       or     unconscionable               means    “to        collect      or

attempt to collect any debt”).                        Instead, Atlas contends that a

proof   of   claim    is        merely    a    “request            to     participate          in   the

bankruptcy process.”            Appellee’s Br. 20.

      Determining whether a communication constitutes an attempt

to collect a debt is a “commonsense inquiry” that evaluates the

“nature of the parties’ relationship,” the “[objective] purpose

and     context      of     the        communication[],”                  and      whether          the

communication includes a demand for payment.                                 Gburek v. Litton

Loan Servicing LP, 614 F.3d 380, 385 (7th Cir. 2010); see also

Olson v. Midland Funding, LLC, 578 F. App’x 248, 251 (4th Cir.

2014)   (citing     Gburek          factors       approvingly).              Here,       the    “only

                                                  9
relationship between [the parties] [is] that of a debtor and

debt collector.”             Olson, 578 F. App’x at 251.                   Moreover, the

“animating purpose” in filing a proof of claim is to obtain

payment     by       sharing    in    the       distribution          of   the        debtor’s

bankruptcy estate.           See Grden v. Leikin Ingber & Winters PC, 643
F.3d 169, 173 (6th Cir. 2011); 4-501 Collier ¶ 501.01.                                    This

fits squarely within the Supreme Court’s understanding of debt

collection for purposes of the FDCPA.                         See Heintz v. Jenkins,

514 U.S. 291, 294 (1995) (explaining that in ordinary English,

an attempt to “collect a debt” is an attempt “to obtain payment

or liquidation of it, either by personal solicitation or legal

proceedings”         (quoting     Black’s       Law     Dictionary         263    (6th     ed.

1990))).    Precedent and common sense dictate that filing a proof

of claim is an attempt to collect a debt.                             The absence of an

explicit    demand      for     payment     does      not     alter    that      conclusion,

Gburek, 614 F.3d at 382, nor does the fact that the bankruptcy

court may ultimately disallow the claim.

      Atlas argues that treating a proof of claim as an attempt

to   collect     a    debt    would   conflict         with    the    Bankruptcy        Code’s

automatic      stay    provision.         The    automatic        stay     provides       that

filing a bankruptcy petition “operates as a stay” of “any act to

collect,    assess,      or    recover      a   claim       against    the    debtor      that

arose     before      the     commencement        of     the    case.”           11    U.S.C.

§ 362(a)(6).         Atlas argues that if filing a proof of claim were

                                            10
an   act   to   collect    debt,     then    such   filing    would    violate     the

automatic stay, “an absurd result.”               Appellee’s Br. 21.

       Atlas’s quandary is easily resolved as the automatic stay

simply bars actions to collect debt outside of the bankruptcy

proceeding.       See, e.g., Cent. States, Se. & Sw. Areas Pension

Fund v. Basic Am. Indus., Inc., 252 F.3d 911, 918 (7th Cir.

2001) (“‘[D]emanding’ payment from a debtor in bankruptcy other

than in the bankruptcy proceeding itself is normally a violation

of the automatic stay”); Campbell v. Countrywide Home Loans,

Inc., 545 F.3d 348, 354 (5th Cir. 2008) (explaining that the

automatic stay “merely suspends an action to collect the claim

outside the procedural mechanisms of the Bankruptcy Code”).                        The

automatic stay helps channel debt collection activity into the

bankruptcy process.        It does not strip such activity of its debt

collection nature for purposes of the FDCPA.

       Finally, Atlas argues that filing a proof of claim is not

an   attempt     to   collect   debt    because      the     proof    of   claim   is

directed to the bankruptcy court and trustee rather than to the

debtor.        However, collection activity directed toward someone

other than the debtor may still be actionable under the FDCPA.

See, e.g., Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 232-33

(4th    Cir.    2007)     (finding    that       FDCPA   “plainly”     applies     to

communications made by debt collector to debtor’s counsel rather

than debtor); Horkey v. J.V.D.B. & Assocs., Inc., 333 F.3d 769,

                                            11
774 (7th Cir. 2003) (finding that debt collector’s phone call to

debtor’s co-worker was “in connection with the collection of a

debt” where purpose of the call was to induce debtor to settle

her    debt).        Although    a     proof       of    claim    is   filed      with   the

bankruptcy      court,     it   is     done    with      the     purpose     of   obtaining

payment from the debtor’s estate.                   That the claim is paid by the

debtor’s estate rather than the debtor personally is irrelevant

for    purposes      of   the   FDCPA.        See       15   U.S.C.    §§    1692e,    1692f

(prohibiting the use of deceptive or unfair means to collect

“any debt,” without specifying a payor).

       Accordingly, we find that filing a proof of claim is debt

collection activity regulated by the FDCPA.

                                           IV.

       We next consider whether filing a proof of claim based on a

debt    that    is    beyond     the     applicable          statute    of    limitations

violates       the   FDCPA.          Deciding       this       issue   requires       closer

examination of the claims process in bankruptcy.

       The Federal Rules of Bankruptcy Procedure specify the form,

content, and filing requirements for a valid proof of claim.

See, e.g., Fed. R. Bankr. P. 3001.                       A properly filed proof of

claim is prima facie evidence of the claim’s validity, and the

claim is “deemed allowed” unless “a party in interest” objects.

11 U.S.C. § 502.          The bankruptcy trustee and debtor are parties

                                              12
in interest who may object. 4         Indeed, the trustee has a statutory

duty to “examine proofs of claims and object to the allowance of

any claim that is improper.”          Id. § 704(a)(5).

     If objected to, the Code disallows claims based on time-

barred debts.      See id. § 502(b)(1) (stating that a claim shall

be disallowed if it is “unenforceable against the debtor . . .

under any agreement or applicable law”); id. § 558 (stating that

the bankruptcy estate has “the benefit of any defense available

to the debtor . . . including statutes of limitation”).                          As

previously noted, debts that are “provided for by the plan or

disallowed under section 502” may be discharged.                       Id. § 1328

(emphasis added).

     Appellants     contend    that     the    FDCPA     should   be   applied   to

prohibit debt collectors from filing proofs of claim on time-

barred debts.      Appellants argue that a time-barred debt is not a

“claim”   within    the    meaning    of     the   Bankruptcy     Code   and   that

filing    claims   on     time-barred      debts    is    an   abusive   practice

     4 While the parties do not address the issue, it appears
that creditors are also parties in interest who may object to a
claim filed by another creditor.    See, e.g., Adair v. Sherman,
230 F.3d 890, 894 n.3 (7th Cir. 2000) (“Parties in interest
include not only the debtor, but anyone who has a legally
protected interest that could be affected by a bankruptcy
proceeding. Therefore, if one creditor files a potentially
fraudulent proof of claim, other creditors have standing to
object to the proof of claim.” (citation omitted)); In re Varat
Enters., Inc., 81 F.3d 1310, 1317 n.8 (4th Cir. 1996) (“All
creditors of a debtor are parties in interest.”).

                                        13
because such claims are seldom objected to and therefore receive

payment    from   the   bankruptcy        estate    to    the    detriment     of    the

debtor and other creditors.               Atlas, meanwhile, argues that a

time-barred debt is a valid “claim” and that filing such a claim

should not be prohibited because only debts that are treated in

the bankruptcy system may be discharged.

                                          A.

        The Bankruptcy Code defines the term “claim” broadly to

mean a “right to payment, whether or not such right is reduced

to   judgment,      liquidated,      unliquidated,             fixed,     contingent,

matured,     unmatured,      disputed,         undisputed,      legal,      equitable,

secured, or unsecured.”          11 U.S.C. § 101(5)(A).                 By using the

“broadest possible definition,” the Code “contemplates that all

legal    obligations    of    the    debtor,       no     matter    how     remote   or

contingent, will be able to be dealt with in the bankruptcy

case,”    thereby   providing       the    debtor        the    “broadest    possible

relief.”     H.R. Rep. No. 95–595, p. 309 (1977); S. Rep. No. 95–

989, p. 22 (1978).

        “[W]hen the Bankruptcy Code uses the word claim . . . it is

usually referring to a right to payment recognized under state

law.”     Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co.,

549 U.S. 443, 451 (2007) (quotation omitted).                       Under Maryland

law, the statute of limitations “does not operate to extinguish

                                          14
[a] debt, but to bar the remedy.”                Potterton v. Ryland Grp.,

Inc., 424 A.2d 761, 764 (Md. 1981) (quotation omitted); see also

Higginbotham v. Pub. Serv. Comm’n of Md., 985 A.2d 1183, 1191

(Md. 2009) (“[W]e have regarded limitations as not denying the

plaintiff’s     right    of   action,    but    only    the   exercise     of     the

right.”   (quotation      omitted)).         Indeed,   a   stale   debt    may     be

revived   if    the     debtor   sufficiently     acknowledges       the       debt’s

existence.      Potterton, 424 A.2d at 764; see also FTC, Time-

Barred Debts (July 2013), https://www.consumer.ftc.gov/articles/

0117-time-barred-debts (“Although the [debt] collector may not

sue you to collect [a time-barred] debt, you still owe it.                       The

collector can continue to contact you to try to collect . . . .

[and] [i]n some states, if you pay any amount on a time-barred

debt or even promise to pay, the debt is ‘revived.’”) (saved as

ECF   opinion   attachment).       Thus,      under    Maryland    law,    a    time-

barred debt still constitutes a “right to payment” and therefore

a “claim” that the holder may file under the Bankruptcy Code. 5

      5Appellants suggest that “by filing proofs of claim on
time-barred debt, Atlas is trying to trick debtors into
unwittingly reviving the statute [of limitations].” Appellants’
Reply Br. 4.   Regardless of whether this is Atlas’s intent, it
is difficult to see how a creditor’s filing a proof of claim
would constitute acknowledgement of the debt by the debtor,
particularly when there is persuasive authority that a debtor
does not revive a time-barred debt by listing it in his
bankruptcy schedules.   See, e.g., Biggs v. Mays, 125 F.2d 693,
697-98 (8th Cir. 1942); In re Povill, 105 F.2d 157, 160 (2d Cir.
1939).

                                        15
      Appellants      note       that   a     debt      must    be       enforceable       to

constitute a claim, citing the Supreme Court’s statement that

“[t]he plain meaning of a ‘right to payment’ is nothing more nor

less than an enforceable obligation.”                   Pa. Dep’t of Pub. Welfare

v. Davenport, 495 U.S. 552, 559 (1990).                      However, we do not read

the   Supreme    Court’s       statement      to   mean       that   a     debt     must   be

enforceable in court to be a claim.                    Indeed, the Bankruptcy Code

treats   debts     that    are    “contingent”          or   “unmatured”        as    claims

notwithstanding that such debts are not presently enforceable in

court.     11 U.S.C. § 101(5)(A).                Furthermore, in Davenport, the

Supreme Court found restitution orders to be claims even though

“neither the Probation Department nor the victim can enforce

restitution obligations in civil proceedings.” 495 U.S. at 558.

Instead,    such    obligations         are      enforced      by    the    “substantial

threat of revocation of probation and incarceration.”                           Id.

      It is also notable that while the Bankruptcy Code provides

that time-barred debts are to be disallowed, see, e.g., 11 U.S.C

§ 558, the Code nowhere suggests that such debts are not to be

filed in the first place.                Indeed, the Bankruptcy Rules were

recently    amended       to   facilitate        the    assessment         of   a    claim’s

timeliness by requiring that claims such as the ones at issue in

this appeal be filed with a statement setting forth the last

transaction date, last payment date, and charge-off date on the

account.     Fed. R. Bankr. P. 3001, advisory committee notes to

                                            16
2012 Amendments (discussing filing requirements for claims based

on open-end or revolving consumer credit agreements).                This Rule

suggests the Code contemplates that untimely debts will be filed

as claims but ultimately disallowed.               Lastly, excluding time-

barred debts from the scope of bankruptcy “claims,” and thus

excluding them from the bankruptcy process, would frustrate the

Code’s “intended effect to define the scope of the term ‘claim’

as broadly as possible,” 2-101 Collier ¶ 101.05, and thereby

provide the debtor the broadest possible relief.                Accordingly,

we   conclude    that    when   the   statute     of   limitations   does   not

extinguish debts, a time-barred debt falls within the Bankruptcy

Code’s broad definition of a claim.

                                         B.

      Next, we consider whether filing a proof of claim on a

time-barred     debt    violates   the    FDCPA   notwithstanding    that   the

Bankruptcy Code permits such filing.              As noted above, the FDCPA

has been interpreted to prohibit filing a lawsuit on a time-

barred debt.     The rationale has been explained as follows:

      As with any defendant sued on a stale claim, the
      passage of time not only dulls the consumer’s memory
      of the circumstances and validity of the debt, but
      heightens the probability that she will no longer have
      personal records detailing the status of the debt.
      Indeed, the unfairness of such conduct is particularly
      clear in the consumer context where courts have
      imposed a heightened standard of care—that sufficient
      to protect the least sophisticated consumer. Because

                                         17
     few unsophisticated consumers would be aware that a
     statute of limitations could be used to defend against
     lawsuits based on stale debts, such consumers would
     unwittingly acquiesce to such lawsuits. And, even if
     the consumer realizes that she can use time as a
     defense, she will more than likely still give in
     rather than fight the lawsuit because she must still
     expend energy and resources and subject herself to the
     embarrassment of going into court to present the
     defense; this is particularly true in light of the
     costs of attorneys today.

Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480, 1487 (M.D. Ala.

1987); see also Crawford, 758 F.3d at 1260; Phillips v. Asset

Acceptance, LLC, 736 F.3d 1076, 1079 (7th Cir. 2013). 6

     We   note    at   the   outset     a    unique    consideration     in   the

bankruptcy context: if a bankruptcy proceeds as contemplated by

the Code, a claim based on a time-barred debt will be objected

to   by   the    trustee,    disallowed,       and    ultimately   discharged,

thereby   stopping     the   creditor       from   engaging   in   any   further

     6 The Eleventh Circuit in Crawford is the only court of
appeals to hold that filing a proof of claim on a time-barred
debt in a Chapter 13 proceeding violates the FDCPA. 758 F.3d at
1256-57.     The   Eighth  Circuit   has  “reject[ed]   extending
the FDCPA to time-barred proofs of claim,” Nelson v. Midland
Credit Mgmt., Inc., No. 15-2984, 2016 WL 3672073, at *2 (8th
Cir. July 11, 2016), and the Second Circuit has broadly held
that “filing a proof of claim in bankruptcy court (even one that
is somehow invalid) cannot constitute the sort of abusive debt
collection practice proscribed by the FDCPA.”         Simmons v.
Roundup Funding, LLC, 622 F.3d 93, 95 (2d Cir. 2010).       Other
circuits are presently considering the issue. See, e.g., Owens
v. LVNV Funding, LLC, No 14-cv-02083, 2015 WL 1826005 (S.D. Ind.
Apr. 21, 2015), appeal docketed, No. 15–2044 (7th Cir. May 13,
2015); Torres v. Asset Acceptance, LLC, 96 F. Supp. 3d 541 (E.D.
Pa. 2015), appeal docketed, No. 15–2132 (3d Cir. May 13, 2015).

                                      18
collection activity. 7             If the debt is unscheduled and no proof of

claim       is    filed,    the    debt      continues    to    exist     and       the   debt

collector        may   lawfully       pursue    collection      activity        apart     from

filing       a    lawsuit.         This   is    detrimental      to     the    debtor       and

undermines the bankruptcy system’s interest in “the collective

treatment of all of a debtor's creditors at one time.”                              1 Norton

Bankr. L. & Prac. 3d § 3:9.                    Clearly, then, when a time-barred

debt is not scheduled the optimal scenario is for a claim to be

filed and for the Bankruptcy Code to operate as written.

       Appellants complain, however, that trustees often lack the

time and resources to examine each proof of claim and object to

those that are based on time-barred debts.                       See Appellants’ Br.

17-18       (explaining        that    Maryland     has   only     three       Chapter      13

trustees         to   manage    approximately       5,000      cases    per     year,     with

approximately 10 proofs of claim filed in each case).                                     Debt

collectors         like    Atlas      purportedly    take      advantage       of    this    by

filing claims on stale debts in hopes that the claims will go

unnoticed and receive some payment from the bankruptcy estate.

When       successful,     these      debt     collectors      reduce    the    amount      of

money available to legitimate creditors and may sometimes cause

debtors to pay more into their Chapter 13 plans.

       7
       By contrast, raising a statute of limitations defense may
defeat a lawsuit to collect a time-barred debt but would not
extinguish the debt or necessarily prevent collection activity.

                                               19
       We appreciate the harm that can be wrought if time-barred

claims go unnoticed.            However the solution, in our view, is not

to impose liability under the FDCPA that would categorically bar

the    filing       of   such      claims,       but     to    improve     the     Code’s

administration such that it operates as written. 8                         This may be

accomplished, for example, by allocating additional resources to

trustees or through action of the United States Trustee, who

appoints     and    supervises      all   Chapter       13    trustees.      28    U.S.C.

§ 586.

       Another consideration that counsels against finding FDCPA

liability is that, for most Chapter 13 debtors, the amount they

pay into their bankruptcy plans is unaffected by the number of

unsecured claims that are filed.                   Chapter 13 debtors typically

do    not   enter    into    100    percent      repayment       plans;    thus,   their

unsecured      creditors      receive       only       partial    payment    of     their

claims, with the remainder being discharged.                      See 8-1328 Collier

¶    1328.02    (“Congress        clearly     contemplated        chapter    13    plans

paying little or nothing on unsecured debts . . . .”).                                As

additional      claims      are    filed,     unsecured        creditors    receive    a

smaller share of available funds but the total amount paid by

       8Indeed, if Appellants are correct that trustees are
failing to fulfill their statutory duty to examine and object to
improper claims, this is surely producing adverse consequences
beyond the context of time-barred debts.

                                            20
the debtor remains unchanged.                     Thus, from the perspective of

most Chapter 13 debtors, it may in fact be preferable for a

time-barred claim to be filed even if it is not objected to, as

the debtor will likely pay the same total amount to creditors

and the debt can be discharged.                    See In re Gatewood, 533 B.R.
905, 909 (8th Cir. BAP 2015) (explaining that “debtors have less

at   stake       in     claims     allowance      than       they      would    when   facing

enforcement        of    an   adverse      judgment          in    a   collection      action”

because the allowance of additional claims would not affect the

total amount the debtor would pay). 9

       Various        other   considerations           also       differentiate     filing   a

proof of claim on a time-barred debt from filing a lawsuit to

collect such debt.               First, the Bankruptcy Rules require claims

like       the   ones    filed     by   Atlas     to    accurately        state     the   last

transaction and charge-off date on the account, making untimely

claims easier to detect and relieving debtors from the burden of

producing        evidence     to    show   that        the    claim     is     time-barred. 10

       9
       As noted above, the FDCPA was enacted in part to protect
scrupulous debt collectors from unfair competition.    However,
bankruptcy creditors are sophisticated entities that may object
to improper claims.   Thus, we will not invoke the FDCPA solely
on their behalf when, as discussed above, there are reasons not
to do so on behalf of bankruptcy debtors.
       10
       There is no allegation that Atlas filed inaccurate proofs
of claim. A debt collector who supplies false dates to obscure
a claim’s staleness may well violate the FDCPA.      However, we
have no occasion to consider that issue today.

                                             21
Second, a bankruptcy debtor is protected by a trustee and often

by counsel who are responsible for objecting to improper claims

even if, as Appellants argue, they currently do not always do

so.   Third, unlike a debtor who is unwillingly sued, a Chapter

13 debtor voluntarily initiates the bankruptcy case, diminishing

concerns     about       the     embarrassment          the      debtor   may      feel   in

objecting to a stale claim.                   In sum, the reasons why it is

“unfair”    and    “misleading”         to   sue       on   a    time-barred      debt    are

considerably      diminished       in   the       bankruptcy       context,       where   the

debtor has additional protections and potentially benefits from

having the debt treated in the bankruptcy process.

      Lastly, Appellants concede that a debt collector would not

violate the FDCPA by filing a proof of claim on a time-barred

debt that the debtor had scheduled and did not designate as

“disputed.”        Appellants        explain        that        scheduling    a    debt   as

undisputed is an “invitation to participate” because it provides

“‘notice to a creditor that its debt will be paid . . . in

accordance    with       the   filed     proof      of      claim,    claims      objection

process, and other bankruptcy provisions.’”                          Appellants’ Br. 28

n.14 (quoting Vaughn, 536 B.R. at 678).                         However, such notice is

sent whether a scheduled debt is disputed or not.                             Moreover, a

time-barred       debt    that     is     disputed          is    less    likely     to   be

inadvertently allowed.             Thus, we see no reason to attach FDCPA

liability    to    a     claim    filed      on    a    time-barred       debt     that   is

                                             22
scheduled as disputed.         Finally, the interests in discharge and

collective treatment of claims discussed above convince us that

FDCPA     liability   should   not   attach   where   a   debtor   fails   to

schedule a time-barred debt.

          We conclude that filing a proof of claim in a Chapter 13

bankruptcy based on a debt that is time-barred does not violate

the FDCPA when the statute of limitations does not extinguish

the debt. 11

                                     V.

     For the foregoing reasons, we affirm the district court’s

dismissal of Appellants’ FDCPA and MCDCA claims.

                                                                   AFFIRMED

     11 In light of this decision, we do not reach Atlas’s
argument that the Bankruptcy Code precludes the FDCPA and
preempts the MCDCA from applying to the filing of a proof of
claim.

                                     23
DIAZ, Circuit Judge, dissenting:

       I join Part III of the majority opinion, which concludes

that       filing        a    proof       of       claim    is    debt-collection       activity

regulated by the Fair Debt Collection Practices Act (FDCPA), 15

U.S.C. § 1692 et seq.

       And     while         I    agree       that     Atlas’s    time-barred        claim   is    a

“claim” under the Bankruptcy Code (as the majority concludes in

Part       IV.A),    I       cannot      agree       that    Atlas’s    alleged       conduct     is

consistent          with         the    FDCPA        (or    the   Maryland      Consumer       Debt

Collection      Act          (MCDCA),        Md.     Code   Ann.,    Com.     Law   § 14-201      et

seq.). 1      Atlas buys the time-barred debt of people in bankruptcy

and    tries        to       collect         by    filing    proofs    of     claim    in    their

bankruptcy proceedings.                      As Atlas concedes, these claims should

fail—the debt is unenforceable in court.                             But, absent objection,

the    Bankruptcy            Code      automatically         allows     all    properly      filed

claims.       11 U.S.C. § 502.                    So Atlas plays the odds, representing

itself as entitled to part of the debtors’ estates.                                   If someone

notices the claims and objects, as happened here, Atlas grins

sheepishly—“You               caught         me!”—and       admits     that    the     claim      is

meritless.           But         if    the     claim    slips     through,    Atlas     uses    the

bankruptcy court to garner a payoff on unenforceable debts.                                       In

       1
       I join the majority in analyzing the FDCPA and MCDCA
claims together, as the parties do.

                                                       24
my view, this sharp practice is misleading and unfair to debtors

and other creditors, and it gives rise to a cause of action

under the FDCPA.

        Moreover, I would hold that the Bankruptcy Code does not

impliedly repeal the FDCPA or preempt the MCDCA.                  Accordingly, I

would vacate the opinion of the district court and remand for

further proceedings.

                                          I.

      The FDCPA aims to “protect[] consumers from abusive and

deceptive    practices   by   debt       collectors,     and . . .     non-abusive

debt collectors from competitive disadvantage.”                   United States

v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 135 (4th Cir. 1996).

The   statute   prohibits     a    wide    variety     of   collection   tactics,

including    the   use   of   “any        false,     deceptive,   or   misleading

representation or means” of debt collection, 15 U.S.C. § 1692e,

and “unfair or unconscionable means to collect or attempt to

collect any debt,” § 1692f.

      Although the FDCPA enumerates specific examples of these

broad    prohibitions,   it       does    so   “[w]ithout     limiting     [their]

general     application.”          Id.         For     example,   “[t]he     false

representation of . . . the character, amount, or legal status

of any debt” is a specific violation of the general ban on

false, deceptive, or misleading representations.                  § 1692e(2)(A).

                                          25
But Congress chose not to limit the general prohibitions, to

“enable       the    courts,        where     appropriate,           to     proscribe        other

improper conduct which is not specifically addressed.”                                    Stratton

v. Portfolio Recovery Assocs., LLC, 770 F.3d 443, 450 (6th Cir.

2014) (quoting S. Rep. No. 95-382 at 4 (1977), as reprinted in

1977 U.S.C.C.A.N. 1695, 1698).

       One such court-imposed proscription applies to lawsuits to

collect time-barred debt.                   Crawford v. LVNV Funding, LLC, 758
F.3d 1254, 1259-60 & n.6 (11th Cir. 2014) (citing cases).                                     Such

lawsuits      raise     two    major        concerns      in     the       consumer       context.

First,    the       “least    sophisticated          consumer”—from            whose      vantage

point    we    view    FDCPA     communications,               see   Russell        v.    Absolute

Collection Servs., Inc., 763 F.3d 385, 394 (4th Cir. 2014)—may

be unaware of the existence of a statute-of-limitations defense

and    may    therefore       “unwittingly          acquiesce          to    such    lawsuits,”

Kimber v. Fed. Fin. Corp., 668 F. Supp. 1480, 1487 (M.D. Ala.

1987).         Second,       “the    passage        of    time       not    only     dulls    the

consumer’s memory of the circumstances and validity of the debt,

but heightens the probability that [the consumer] will no longer

have     personal      records       detailing           the    status       of     the    debt.”

Phillips v. Asset Acceptance, LLC, 736 F.3d 1076, 1079 (7th Cir.

2013) (quoting Kimber, 668 F. Supp. at 1487).

       These        same     considerations              support       recognizing           FDCPA

liability for filing time-barred claims on unscheduled debts in

                                               26
bankruptcy. 2         Crawford, 758 F.3d at 1260-61.               But see Nelson v.

Midland Credit Mgmt., Inc., No. 15-2984, 2016 WL 3672073, at *2

(8th       Cir.     July    11,     2016)    (published      opinion)     (refusing         to

“extend[] the FDCPA to time-barred proofs of claim” because the

Bankruptcy Code’s “protections against harassment and deception

satisfy the relevant concerns of the FDCPA”).                           Here, where the

proofs of claim provide enough information to determine the debt

is     time       barred,     the    first    consideration        is    of       particular

importance.           An     unsophisticated        debtor    reviewing       a    proof    of

claim may be unaware of the statute-of-limitations defense and—

perhaps        not    appreciating          the     legal    significance          of   even

accurately          listed     last-transaction        and     charge-off          dates—may

nevertheless “acquiesce” to the claims.

       While some courts have found the role of the bankruptcy

trustee        in     weeding        out     time-barred      claims       critical         in

distinguishing the bankruptcy context from civil lawsuits, see,

e.g., Nelson, 2016 WL 3672073, at *2, I am not persuaded.                                   At

best,      a   debt    collector       who    files    such    a   claim      wastes       the

trustee’s         time.       At    worst,    the    debt    collector        catches      the

trustee asleep at the switch and collects on an invalid claim to

       2
       As the debtors concede, their case might be different had
they scheduled these debts with the bankruptcy court, an action
that might be seen as an invitation to a creditor to file a
claim.

                                              27
the detriment of other creditors and, in many cases, the debtor.

In either case, the debt collector misleadingly represents to

the debtor that it is entitled to collect through bankruptcy

when it is not.

     Moreover,       there      is   reason     to    doubt    the    efficacy        of    the

trustee as a vigilant steward of the debtor’s estate.                                      See,

e.g., In re Edwards, 539 B.R. 360, 365 (Bankr. N.D. Ill. 2015)

(“Chapter 13 trustees in this district do not object to proofs

of claim based on statute of limitations defenses.                             This is not

surprising    because          objecting   to    claims       based       on    affirmative

defenses     would    require        trustees        to    examine    the       details     of

virtually     every       unsecured     proof        of    claim,    which       is   simply

impracticable.”).           Indeed, if trustees performed their duties

flawlessly, Atlas would have little incentive to engage in its

scheme.

     Like filing a lawsuit on time-barred debt, Atlas’s alleged

debt-collection activity in this case is precisely the sort of

unfair and misleading practice that Congress intended the courts

to   recognize       as    a    violation.           After    the     debtors         entered

bankruptcy, Atlas bought their debts, or rather, as the bill of

sales said, “charged-off receivables.”                     J.A. 58, 132, 143.              All

of these charged-off debts were more than five-years old, well

outside      Maryland’s           three-year          statute        of        limitations.

Nevertheless,        Atlas      filed   proofs        of    claim     to       recover     the

                                           28
unenforceable debts in the bankruptcy court.                 The relevance of

the statute of limitations was not lost on Atlas, which included

the following notice on two of the three proof-of-claim forms it

filed: “This proof of claim is being filed pursuant to 11 USC

Secs. 101(5), 501(a) and 502(b) as said claim may be outside of

the statute of limitations.”            J.A. 55, 140.         Section 502(b)

explains that if a claim is objected to, the court will allow

the   claim    “except   to   the    extent     that . . .    such   claim    is

unenforceable against the debtor and the property of the debtor,

under any agreement or applicable law.”            § 502(b)(1).      In short,

Atlas knew exactly what it was doing—exploiting a weakness in

the bankruptcy system and preying on potential error to collect

on debts where it should not.               The practice subverts a core

purpose   of   bankruptcy     by    diverting    estate    assets    from    the

creditors entitled to receive them.

      Atlas rather stunningly argues that it is doing a public

service: “[B]ut for Atlas’ filing of its proofs of claim, those

debts would not be subject to discharge and at the conclusion of

Appellants’    chapter   13   cases,    Atlas    could    restart    collection

activity with respect thereto so long as it does not otherwise

violate the FDCPA.”      Appellee’s Br. at 40.            Really?    While the

statement is literally true, the (unintended) possibility that

the time-barred debts will be disallowed and discharged hardly

justifies Atlas’s tactics.          Moreover, that the debtors did not

                                       29
schedule the debts is some evidence that collection efforts have

stopped.      And it would not be surprising if they had; the time

for enforcement has passed, and the combination of the statute

of    limitations        and    the    FDCPA    seriously       limits   what    a   debt

collector can do to recover old debts.                     Ideally, debtors would

remember all their old debts, realize they were time barred,

schedule them as disputed, and see that they were disallowed.

But the FDCPA asks what the least sophisticated consumer would

do, not the ideal one.                 Atlas’s conduct games the bankruptcy

process; it does not ensure its integrity.

       Accordingly, I would hold that Atlas’s conduct constitutes

a violation of the FDCPA.                    Such a holding would not impose a

great burden on debt collectors.                      “[A] debt collector is not

liable in an action brought under the [FDCPA] if [it] can show

‘the violation was not intentional and resulted from a bona fide

error notwithstanding the maintenance of procedures reasonably

adapted     to     avoid       any    such     error.’”         Jerman   v.    Carlisle,

McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 576 (2010)

(quoting 15 U.S.C. § 1692k(c)).                    Atlas and other debt collectors

can   avoid      FDCPA     liability     by     putting    in    place   a    reasonable

procedure     to    screen       unscheduled,        time-barred     claims—if       Atlas

already has such a procedure, it can prove it in the district

court.

                                              30
                                            II.

     Because the majority determines that the FDCPA does not

reach Atlas’s conduct, it does not address the question whether—

if the FDCPA on its own terms would apply to the filing of time-

barred claims—the Bankruptcy Code nevertheless precludes such an

action.       To        determine     whether       two     federal       statutes       are

compatible,        we     employ        ordinary      statutory           interpretation

principles.    See POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct.
2228, 2236 (2014).            Because the circuits are split on this issue

and the arguments have been made extensively on both sides, I

explain    briefly       my     position     that    the     two    statutes       do    not

conflict in this instance.

     The   Second        and    Ninth     Circuits    have     concluded       that      the

Bankruptcy    Code       precludes        certain    FDCPA    suits.         Simmons      v.

Roundup    Funding,        LLC,     622 F.3d 93,     95-96    (2d    Cir.        2010)

(rejecting    an        FDCPA     claim    brought        during    the    pendency       of

bankruptcy proceedings for the filing of an inflated proof of

claim); Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 510-11

(9th Cir. 2002) (barring an FDCPA claim for post-bankruptcy debt

collection in violation of the discharge order).                           Both rely on

the comprehensive provisions and protections of the Bankruptcy

Code to hold that it leaves no room for FDCPA claims.                          Simmons,
622 F.3d at 96; Walls, 276 F.3d at 510.

                                            31
      The Third, Seventh, and Eleventh Circuits have rejected the

notion that FDCPA actions may not be brought in the context of

bankruptcy.       Johnson v. Midland Funding LLC, Nos. 15-11240, 15-

14116,     2016 WL 2996372,     at     *6     (11th       Cir.        May    24,    2016)

(published opinion) (holding that the Bankruptcy Code does not

impliedly repeal FDCPA actions for filing proofs of claim on

time-barred debt); Simon v. FIA Card Servs., N.A., 732 F.3d 259,

274 (3d Cir. 2013) (permitting an FDCPA claim for the violation

of   the   Bankruptcy      Code’s    subpoena          requirements);            Randolph   v.

IMBS, Inc., 368 F.3d 726, 730-31 (7th Cir. 2004) (comparing the

FDCPA and Bankruptcy Code and concluding they are compatible).

In   the   view    of   these     courts,    the       statutes       do    not    expressly

contradict        one   another,     nor         are    they     in        “irreconcilable

conflict”    because       “any    debt    collector       can    comply          with   both

simultaneously.”         Randolph, 368 F.3d at 730; accord Johnson,

2016 WL 2996372, at *5-6; Simon, 732 F.3d at 273-74; see also

Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 551 U.S. 644,

662 (2007) (“While a later enacted statute . . . can sometimes

operate     to     amend     or     even     repeal        an     earlier          statutory

provision . . . , ‘repeals by implication are not favored’ and

will not be presumed unless the ‘intention of the legislature to

repeal [is] clear and manifest.’” (third alteration in original)

(quoting Watt v. Alaska, 451 U.S. 259, 267 (1981))).

                                            32
      I   would    side     with    the    view       of    the    Third,   Seventh,      and

Eleventh Circuits, at least on the facts of this case.                                  Atlas

does not argue that the Bankruptcy Code expressly bars FDCPA

remedies.       Instead, it contends the statutes are irreconcilable:

“[W]hat [the debtors] allege is prohibited by the FDCPA (the

filing of a proof of claim with respect to a ‘stale’ debt) is

expressly permitted by the Bankruptcy Code.”                            Appellee’s Br. at

34.       But     this     argument       is    easily        answered:      Because     the

Bankruptcy Code does not obligate a creditor to file a proof of

claim,    a     debt    collector    such      as     Atlas      can    comply   with    both

statutes by not filing unscheduled, time-barred proofs of claim.

See Johnson, 2016 WL 2996372, at *6; Randolph, 368 F.3d at 730. 3

      This conclusion is buttressed by our holding, in a somewhat

different posture, that an FDCPA claim may be brought during

bankruptcy proceedings.             Covert v. LVNV Funding, LLC, 779 F.3d
242, 246-48 (4th Cir. 2015).                        In Covert, debtors filed suit

under     the    FDCPA     and     MCDCA       after       the    completion     of     their

bankruptcies,          alleging    that    a    creditor          had   unlawfully      filed

proofs of claim without a debt-collection license.                           Id. at 245.

We found the claims barred by res judicata because the debtors

failed to raise them during the bankruptcy.                               Id. at 247-48.

      3For similar reasons, I would hold that the Bankruptcy Code
does not preempt the MCDCA.

                                               33
Because res judicata applies to unraised claims only if they

“could have been adjudicated in an earlier action,” id. at 246,

we   necessarily    determined   that     the   debtors   “could . . .     have

brought their affirmative claims for damages [under the FDCPA

and MCDCA] during the bankruptcy process under Federal Rule of

Bankruptcy Procedure 7001(1), which provides that ‘a proceeding

to recover money or property’ may be brought as an adversary

action,”   id.     at   248.     Similarly,      I   would   hold   that   the

Bankruptcy Code does not preclude or preempt the filing of the

FDCPA and MCDCA claims in this case.

                                    III.

      Because I believe the debtors state a claim under the FDCPA

(and MCDCA), I would reverse and remand for further proceedings.

                                     34