U.S. Supreme Court divided over debt collection dispute

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By Lawrence Hurley

<span class="articleLocation”>The U.S. Supreme Court on Tuesday appeared
divided as it weighed whether people who have filed for
bankruptcy can sue companies that attempted to collect old debt
from them that was not required to be paid back because of state
statutes of limitations.

During arguments in the case, three liberal justices seemed
sympathetic toward an Alabama debtor named Aleida Johnson, who
entered bankruptcy in 2014. But Stephen Breyer, the fourth
liberal on the eight-justice court, joined conservatives in
raising questions about the broad implications of a ruling
against the debt collection company, Midland Funding, a
subsidiary of Encore Capital Group.

The court is evenly divided between conservatives and
liberals.

Midland sought payment of $1,879 in debt that Johnson had
incurred more than a decade earlier. Alabama law sets a six-year
statute of limitations for debt to be collected.

Lawyers for debtors have said it is common practice for debt
collection companies, which buy consumer debt at pennies on the
dollar, to attempt to recoup debt that is not legally
recoverable under state law unless the creditor actually agrees
to pay it.

A ruling is due by the end of June.



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