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Does a Debt Collector Have to Notify You that a Debt is Time-Barred?

Does a Debt Collector Have to Notify You that a Debt is Time-Barred?The Seventh Circuit Court of Appeals recently held that a debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by offering to “settle” a time-barred debt without also disclosing that the debt was past the statute of limitations and thus could not be enforced by legal action. The Third and Eighth Circuits previously disagreed and held that such offers to “settle” time-barred debts do not violate the FDCPA unless the offers are accompanied by threats of legal action. 

The Eleventh Circuit, our Circuit here in Florida, has yet to weigh in on this legal question; however, LeavenLaw is actively litigating this very issue in a Middle District of Florida federal case entitled Mullins v. Total Card, Inc. In Mullins, the debt collector offered the consumer several settlement offers on a time-barred debt without also disclosing the fact that the subject debt was time-barred and past the statute of limitations. The debt collector also deceptively suggested that it was working on behalf of the consumer rather than the creditor, and that misrepresentation is also before the court as a violation of consumer protection laws.  

The Seventh Circuit, in a case entitled McMahon v. LVNV Funding (and a companion case), held that the analysis under the FDCPA is straightforward: a debt collector misleads a consumer to believe a time-barred debt is legally enforceable, regardless of whether litigation is threatened, when an offer to “settle” is made, as such offers misrepresent the character or legal status of the debt. The court stated the “plain language of the FDCPA prohibits not only threatening to take actions that the collector cannot take, but also the use of any false, deceptive, or misleading representation, including those about the character or legal status of any debt.” The Seventh Circuit further noted that its ruling was consistent with the positions taken by the Federal Trade Commission and the Consumer Financial Protection Bureau. We here at LeavenLaw believe the Middle District of Florida, and the Eleventh Circuit if the decision is appealed, will follow the sound reasoning of the Seventh Circuit by finding that debt collectors violate the FDCPA by offering to settle time-barred debts without disclosing that such debts are legally unenforceable.  

In Florida, the statute of limitations on credit cards and other written agreements is five years.  Therefore, if a debt collector is trying to collect a debt from you, or someone you know, that is older than five years, please contact us at (727) 327-3328 or visit Our initial consultation is always free, and you may be entitled to damages and the debt collector may have to pay our attorney’s fees.