A District Court judge in Georgia has partially granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case stemming from collection efforts on a home equity line of credit that originated in 1999 and may have been legally unenforceable by the time the defendant came looking for payment.
The background: The plaintiff obtained a $32,000 HELOC in 1999. The loan became delinquent around 2013 after she lost access to her mobile payment app and could not locate the servicer. She made attempts to find out where to send payments but never received a response or a statement. The loan matured in August 2014. She heard nothing for the next decade.
- That changed in 2024, when the defendant began contacting her on behalf of a trust, warning that she could face foreclosure if she did not pay. The plaintiff had also received a Chapter 7 bankruptcy discharge back in 2006, which eliminated her personal liability on the debt, though the lien on her home remained. Critically, the defendant did not check whether she had a prior bankruptcy before initiating contact.
- Adding another wrinkle: by the time the defendant started collecting, the security deed may have already expired under Georgia’s title reversion statute. Under state law, title on a perpetual or indefinite security interest reverts to the grantor seven years after loan maturity if no tolling event occurs. That would have put the reversion date at August 2021, three years before the defendant sent its first letter.
- The plaintiff eventually made over $3,500 in payments under the threat of foreclosure before filing suit in May 2025 asserting FDCPA violations, intentional infliction of emotional distress, Georgia RICO, and other claims.
The ruling: Judge Clay D. Land of the District Court for the Middle District of Georgia denied the defendant’s motion for summary judgment on the FDCPA claim, finding enough evidence for a jury to conclude the defendant qualifies as a debt collector. The court noted that the defendant identified itself as a debt collector in nearly every communication with the plaintiff, and the loan was already in default when the defendant took over servicing.
- The emotional distress and Georgia RICO claims did not survive. Judge Land found no evidence that the defendant knew its statements about the legal status of the debt were false, or that it acted with reckless disregard for that possibility. The plaintiff’s theory, that the defendant simply should have investigated before making representations, was not enough to meet the intent requirements for either claim.
- The declaratory judgment claim seeking a ruling that the security deed was unenforceable and the personal liability extinguished was also dismissed, because the purported owner of the note was never made a party to the case.
