Summary:
Debtor objected to a Proof of Claim in a 100% dividend Chapter 13 plan filed by Oak Harbor Capital VII (“Oak Harbor”) for an obligation purchased from Barclays Bank, asserting that the claim fails to comply with the requirements of certain subsections of the North Carolina Collection Agency Act (“NCAA”) N.C.G.S. § 58-70-1 et seq. , and therefore should be disallowed pursuant to 11 U.S.C. § 502(b)(1).
Finding that while some applicable non-bankruptcy law, such as the Statute of Limitations, would render a claim unenforceable, the NCCCA at N.C.G.S. § 58-70-150, specifically applies to a complaint or “cause of action” filed by a debt buyer to collect debts. Following, Jenkins v. Genesis Fin. Solutions (In re Jenkins), 456 B.R. 236 (Bankr. E.D.N.C. 2011), the court held that it would not find that “a creditor’s filing of a proof of claim in a bankruptcy case constitutes an effort to ‘collect’ within the meaning of [the NCCAA].”
Additionally, the court held that as Oak Harbor had filed a timely Proof of Claim, its later amendment to supply documentation necessary under N.C.G.S. § 58-70-150, would have been “freely given.”
Commentary:
Given the attorney involved in this case and also in Unifund CCR Partners v. Dover, 2009 N.C. App. LEXIS 1739 (N.C. Ct. App. 2009), it is rather ironic and disappointing that the common law requirements for showing an “account stated” as an exception to the Statute of Frauds, at N.C.G.S. § 25-2-201, were not raised. In order to establish an “account stated” under North Carolina law, a creditor must show an “itemized statement”, that the Affiant has personal knowledge of an existing debt between the parties, that the Debtor has accepted the correctness of the statement and made an “express or implied promise to pay the balance allegedly due.” Id. At 8.
While the Debtor in this case may have, by failing to list the debt as disputed, acknowledged it as correct, it does not appear that the original Proof of Claim met the requirements for either the Statute of Frauds, i.e. a written contract for the sale of goods more than $500.00, or an “account stated”, as there was not an itemization of the account verified by an Affiant with personal knowledge of the obligation.
See also Citibank, S.D., N.A. v. Graudin, 2011 N.C. App. LEXIS 2259 (N.C. Ct. App. 2011) at: http://ncbankruptcyexpert.com/?p=351
For a copy of the opinion, please see:
Nussman- North Carolina Collection Agency Act to inapplicable to Proofs of Claims
Unifund CCR v. Dover
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