The U.S. Supreme Court has decided to hear an appeal filed by Midland Funding, a subsidiary of Encore Capital Group, which was sued by an Alabama debtor named Aleida Johnson. Johnson entered into bankruptcy in 2014 and claims Midland Funding has sought payment of $1,879 in debt that Johnson had incurred more than a decade earlier. Alabama has a six-year statute of limitations for debt to be collected.
Supreme Court Justices will decide whether or not people can sue companies who have attempted to collect debts that they are not legally required to pay back due to their state’s statute of limitations.
It is common practice for some debt collection companies to attempt to collect on an old debt that is not legally recoverable under state law. However, if a debtor does not object to the payment, claims can be made against them when they enter into bankruptcy.
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