In Easterling v. Collecto, Inc., — F.3d —-, 2012 WL 3734389 (2d Cir. 2012), the Court of Appeals for the Second Circuit held that a student loan debt collector’s representation that the debtor’s loans were not eligible for discharge in bankruptcy was false, triggering FDCPA liability.
Instead, the operative inquiry in this case is whether the hypothetical least sophisticated consumer could reasonably interpret the Collection Letter’s statement that “Your account is NOT eligible for bankruptcy discharge,” App. 18, as representing, in-correctly, that the debtor is completely foreclosed from seeking bankruptcy discharge of the debt in question. When properly framed in this manner, we think it clear that the Collection Letter is “false, deceptive, or misleading” in violation of the FDCPA. See 15 U.S.C. § 1692e. There may be several steep procedural and substantive hurdles standing in the way of Easterling achieving bankruptcy discharge of her student loans. However, this does not alter the fact that, as Collecto and the district court acknowledge, Easterling at all times fully retained her right to seek bankruptcy discharge of her debt. Moreover, as any-one familiar with life’s fragility can attest, it is possible that Easterling’s life circumstances could have changed since her November 2001 bankruptcy proceeding (or will change in the future), such that she could meet the “undue hardship” standard articulated by this Court in Brunner. Accordingly, we conclude that the Collection Letter’s statement that Easterling’s student loan debt was “ineligible for bankruptcy discharge” was false on its face.