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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
Sometimes, even doing the right thing isn’t enough. A collection operation is facing a lawsuit in Minnesota state court for filing a collection lawsuit four days after the plaintiff filed for bankruptcy protection, and then, when it was notified of the filing, the collector apparently didn’t dismiss the suit in the way the plaintiff wanted.
The background: The plaintiff filed for Chapter 7 bankruptcy protection on June 10. In the filing, the plaintiff listed a debt owed to the defendant, among others.
- Four days later, the collector filed a collection lawsuit on the unpaid debt. Three days after that, the defendant sought a default judgment on the grounds that it was unable to accomplish personal service of the summons and complaint.
- On June 28, the defendant dismissed the collection lawsuit. The plaintiff’s attorney asked the defendant to vacate the motion instead since it was commenced after the commencement of the bankruptcy and because future landlords or financial institutions that search court records will see the action and be less likely to work with the plaintiff or extend her credit, according to the complaint.
The claims: The complaint accuses the defendant of violating Section 1692e(5) of the FDCPA, which prohibits collectors from making false or misleading statements or attempting acts that are beyond their powers.
- The plaintiff agreed to waive all claims if the defendant would vacate the action but the defendant did not respond, according to the complaint.
- The defendant’s actions cause the plaintiff to suffer emotional distress, including frustration, confusion, and helplessness because she saw legal actions taking place against her that she thought were blocked by the automatic stay of filing for bankruptcy protection.
