The Alabama Supreme recently reiterated its position of judicial estoppel in regards to listing assets in a bankruptcy filing. The debtor failed to list a medical malpractice cause of action (she lost both legs below the knee) in her Chapter 7 petition. After she received her discharge, she filed her malpractice action. The defendant found out about her bankruptcy filing and moved the court to estop or dismiss her malpractice action due to her failure to list it. In the mean time, the Chapter 7 trustee found out about the malpractice action and asked the court to allow him to take over the action, since it was an asset of the Chapter 7 estate. The court granted the motion to estop the debtor/plaintiff and granted the trustee’s motion to take over the suit. So the debtor discharged $28,000.00 in debt, but lost out on a potential million dollar judgment. The moral of this story debtors–list any and all assets no matter how trivial or unlikely they may be. See Supreme Court of Alabama, Oct. Term, 2014-2015, 1130342, Ex parte Jackson Hospital & Clinic, Inc., et al., Petition for Writ of Mandamus (In re: Joanne Anderson v. Jackson Hospital & Clinic, Inc., et al, Montgomery Circuit Court, CV-12-1044).
11th Circuit rules that filing proof of claim for a stale debt in Chapter 13 violates Fair Debt Collection Practices Act. This means creditors that try to collect a debt no longer collectable under state law (statute of limitations has run for instance) are subject to suit under the FDCPA. See Crawford v. LVNV Funding, LLC, et al. (In re Crawford), Case No. 13-12389, Opinion (11th Cir. Jul. 10, 2014) (“Crawford”).