In a recent podcast episode, The Consumer Finance Podcast delved into the details of the Consumer Financial Protection Bureau’s (CFPB) latest advisory opinion on time-barred debt collection. Hosted by Chris Willis, joined by colleagues Stefanie Jackman, Joe Reilly, and Jonathan Floyd, the podcast takes listeners through the key events that led up to this opinion and its implications.
The CFPB Advisory Opinion was scrutinized, with an in-depth look at whether or not a Fair Debt Collection Practices Act (FDCPA)-covered debt collector can resort to legal action to collect a time-barred debt. The principle of time-barred debt refers to old debt that a consumer is no longer legally obligated to pay due to the passage of time. In most cases, creditors and debt collectors lose the legal right to sue for an unpaid debt once it is time-barred.
The podcast discussion also brings into focus how this new opinion aligns or contradicts with state law analogs. As different states have various statutes of limitations for different types of debt, this advisory opinion may have significant impacts on state-level collection practices.
While the full details of the advisory opinion are complex, all legal professionals dealing with debt collection can benefit from the podcast’s key takeaways. With the potential to reshape some practices within the industry, understanding the CFPB’s advisory opinion is critical for law firms and corporations involved with, or being impacted by, debt collection issues.