• DYE CULIK PC | Consumer Protection Division

CACH, LLC Has Filed for Bankruptcy. How Does This Affect Its Pending Debt-Collection Cases?

CACH Debt Collector

The debt collector CACH, LLC and its parent company, Square Two Financial, filed for bankruptcy on March 19, 2017. Many consumers were in the midst of debt-collection lawsuits filed by CACH, or were receiving collection calls and letters when this happened. What effect does CACH’s bankruptcy have on these consumers?

Because the bankruptcy was filed recently, many issues are still up in the air. But, CACH filed a motion when its bankruptcy was filed obtaining court permission to continue its debt-collection cases. Therefore, the bankruptcy does not stop CACH from collecting.

The bankruptcy cuts off some rights of consumers sued by CACH. Consumers are prohibited from suing them, even if it commits violations of consumer-protection laws like the Fair Debt Collection Practices Act or the Massachusetts Consumer Protection Act, called Chapter 93A. When anyone – even CACH – files for bankruptcy, the court rules forbid the bankrupt person from being sued.

This may be a minor issue, though. CACH usually uses third-party debt collectors or attorneys to handle its collections. Therefore, if there is a violation of the FDCPA or Chapter 93A, CACH’s collectors can probably be held responsible.

Also, this doesn’t mean that you cannot defend yourself if they file a debt-collection lawsuit against you. If they violated the FDCPA or Chapter 93A, you can use the value of those violations to offset anything CACH claims you owe to it.

Another thing you can do if CACH has violated consumer-protection laws is file what is called a “proof of claim” in its bankruptcy. This is a notice to the court that you believe you are entitled to damages due to something wrong CACH has done. This probably will not do much good, though – because of the bankruptcy, most proofs of claim are going to be paid little or nothing.

If you want to monitor CACH’s bankruptcy case, you can check out the website with all the court filings here:

Square Two/CACH Online Bankruptcy Docket

Culik Law has defended numerous debt-collection lawsuits by CACH, LLC. If you’ve been sued by them in Massachsuetts, contact us to see if we can help.

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