So why the hubbub about these stale debts?
If you read Midland and Mertola together it appears debt buyers can purchase and try to collect on debts that are very, very old because the creditor never accelerated the loan by calling it all due and payable (in writing). Now the Supreme Court opened the door for debt collectors/buyers to file proof of claims for debts never accelerated (Arizona) and/or stale with the hopes of collecting in a bankruptcy.
Note – remember the statute of limitations is an affirmative defense.
My concern – in a non-Arizona accelerated situation, normally a debt becomes uncollectable once the applicable statute of limitations expires; only to be reborn if the borrowers make any payment on the debt. Therefore, under Midland, if the creditor, debt collector or buyer receives just one cent from the bankruptcy claim the debt is reborn and, if the bankruptcy is dismissed (not discharged) that will give the creditor or debt collector the right to sue and collect on the original debt, plus all contractual interest and penalties.
Future business for creditors
I predict that all creditors will set up their own subsidiaries to “buy” stale debts (some have already done so). For Arizona residents those creditors will let the debt sit for decades and then pounce on the borrower when their finances have improved. Some of you believe that is only fair “after all they borrowed the money and should pay it back”. Others will feel that everyone has the right to move on with their lives and not suffer for mistakes or circumstances that happened decades earlier.