Second Circuit joins the Seventh and Third Circuits in holding that the Bankruptcy Code does not provide the exclusive remedy for post-discharge violations and can be pursued under the FDCPA

In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit examined the question whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt Collection Practices Act (FDCPA) or must seek relief in the bankruptcy court. After the debtor had been discharged, she stopped making payments. Her lender contacted her demanding payment for both her pre-discharged debt and her post-discharged debt. She sued her lender in district court under the FDCPA. The district court dismissed the complaint, holding that the Bankruptcy Code provided the exclusive remedy for these claims and that to the extent a remedy existed under the FDCPA, it conflicted with the Bankruptcy Code and was therefore precluded. The Second Circuit reversed. It previously held in Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2d Cir. 2010) that the FDCPA does not authorize suit for claims made while the debtor is in bankruptcy. But this case involved a claim brought after discharge. The Court found there was no irreconcilable conflict between the post-discharge remedies of the Bankruptcy Code and the FDCPA so it refused to find an express or implied intention to repeal portions of the FDCPA with the enactment of the Bankruptcy Code. In the post-bankruptcy discharge context the debtor no longer has the protection of the bankruptcy court. The Bankruptcy Code provision governing the discharge injunction, does not explicitly create a cause of action for its violation, whereas the automatic stay provision provides such a remedy, see id. § 362(k). Thus, the conflict was not only not plain enough to require recognition of an implied intent to appeal, but would also deprive the debtor of a remedy under the FDCPA where the Bankruptcy Code provided no corresponding remedy. With this opinion, the Second Circuit joins the Seventh Circuit, Randolph v. IMBS, Inc., 368 F.3d 726, 728 (7th Cir. 2004), and the Third Circuit (Simon v. FIA Card Services, N.A., 732 F.3d 259, 274 (3d Cir. 2013)) in holding that the FDCPA and Bankruptcy Code, although overlapping in certain respects, do not work any kind of express or implied repeal of a debtors right to proceed under the FDCPA.

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