Massachusetts Courts Disagree on Bankruptcy Law Superceding Specific Federal Consumer Protections
By L. Jed Berliner, Springfield Bankruptcy Attorney on Oct 21, 2007 in Automatic Stay, Bankruptcy Cases of Interest, Bankruptcy Practice and Procedure, Benefits of Bankruptcy, Consumer Protection, Debt Collector Abuses, Decisions of Interest, Lawyer to Lawyer, Massachusetts, Mortgages, Pay-Off Statements
Two Massachusetts courts disagree on whether bankruptcy laws supercede federal consumer protection statutes. Ameriquest Mortg. Co. v. Nosek (In re Nosek), 354 B.R. 331 (D MA 2006) ruled that bankruptcy laws are all-encompassing and replace the other specific statutes, while Holland v. EMC Mortg. Co. (In re Holland), 2007 Bankr. LEXIS 3187 (Bankr D MA 2007) ruled otherwise.
There are a number of federal consumer protection laws, including Fair Debt Collection Practices Act (FDCPA, Fair Credit Reporting Act (FCRA), Truth in Lending Act (TILA), and Real Estate Settlement Practices Act (RESPA, also known as the Servicer Act, which actually is a subset of TILA). There also is the very exensive Bankruptcy Code with its automatic stay (sanctions left to the court’s discretion) and claim objection procedures (facially simple but not so in practice when discovery is required).
There are strong tactical and strategic reasons for exercising rights under the separate consumer protection statutes, including a debtor’s receipt of automatic disclosures upon simple request and automatic statutory damages - both obligations not existing in the Bankruptcy Code. This author applauds Attorney David Baker, debtor’s counsel in the Holland case, for successfully resisting the Nosek ruling.
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