On March 11, the U.S. Court of Appeals for the 11th Circuit affirmed a lower court’s dismissal of a consumer’s FDCPA action. The consumer alleged that his mortgage servicer violated the FDCPA by attempting to collect overdue payments beyond Florida’s five-year statute of limitations for foreclosure actions. According to the opinion, the consumer “stopped paying his mortgage in 2008 and has not made payments since then.” In 2009, the servicer invoked an acceleration clause and attempted to foreclose on the property, but the foreclosure action was dismissed in 2011. In 2015, the servicer sent another notice of default, accelerated the debt once again, and filed a second foreclosure action seeking the entire debt, including all delinquent payments since 2008. The consumer filed suit, arguing that the servicer, by seeking pre-2010 debt in 2015, violated the FDCPA’s prohibition on the collection of time-barred debts. The lower court dismissed the action.
On appeal, the 11th Circuit held that the pre-2010 debt sought in the 2015 foreclosure action “was not time-barred as a matter of law” and therefore did not violate the FDCPA. The 11th Circuit found that Florida’s five-year statute of limitations does not necessarily bar the recovery of payments that were originally due more than five years prior to the filing of the foreclosure action. Instead, any time a consumer defaults and the servicer invokes an acceleration clause, the entire debt “comes due” and the five-year clock starts to run.