By: Derek Hawkins//August 6, 2018//
7th Circuit Court of Appeals
Case Name: Amy Dunbar, et al. v. Kohn Law Firm, S.C., et al.
Case No.: 17-2134
Officials: SYKES and HAMILTON, Circuit Judges, and LEE, District Judge
Focus: FDCPA Violation
Amy Dunbar and Tammy Smith received collection letters offering to settle their debts at a significant discount. Both letters included the warning: “This settlement may have tax consequences.” In separate suits Dunbar and Smith claimed that this statement is misleading in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692e, because they were insolvent when they received the letters and therefore would not have incurred a tax liability for any discharged debts.
The courts below rejected that argument and dismissed the suits on the pleadings. We consolidated the appeals and now affirm. The challenged statement is not false or misleading because “may” does not mean “will” and insolvent debtors might become solvent before settling their debt, triggering the possibility of tax consequences.
Affirmed