A group of plaintiff’s attorneys in North Carolina are touting a $1.2 million settlement recently obtained in a case against a medical debt collection agency.
The case against the unnamed collection agency stemmed from an alleged attempt to collect a debt that had been discharged via a Chapter 7 bankruptcy filing, according to the plaintiff’s attorneys, Gary Jackson and Christopher Bagley, along with Ed Maginnis and Karl Gwaltney of Maginnis Law PLLC.
“A Chapter 7 discharge is supposed to be a fresh start for a consumer whose debts have overwhelmed their ability to pay. More than 400,000 consumer debtors file for Chapter 7 relief each year, and those bankruptcies typically follow sudden catastrophes like injuries or illnesses that require medical treatment,” Jackson said in a statement.
As many as 12,000 other potential victims who were subjected to “potentially unlawful” collection practices were identified by the plaintiff’s attorneys, they said. That list was whittled down to an unidentified number who are eligible to recover some of the $1.2 million settlement.
While the collector scrubbed new accounts to make sure it was not going to attempt to collect from someone who had filed for bankruptcy protection, it did not have procedures in place to identify accounts that filed for bankruptcy protection after they were placed, Maginnis said in a published report
