In re Vaughn, 536 B.R. 670

Debtor filed Chapter 13 on May 29, 2015, listing an alleged debt to LVNV (account ending 6063) on Schedule F and proposing a plan paying unsecured creditors ~10%.
LVNV filed a timely proof of claim for $1,766.70, asserting assignment from Citibank (S.D.) with last payment in 2009 and transfer to LVNV in 2010.
Debtor objected that the claim is time-barred under South Carolina’s 3-year statute of limitations; LVNV argued the debt was revived because Debtor listed it on her bankruptcy schedules without marking it "disputed."
Debtor later amended schedules to mark the debt as disputed; parties litigated whether listing a stale debt on bankruptcy schedules can revive it under South Carolina law or federal bankruptcy principles.
The Court held that federal bankruptcy policy and South Carolina law do not permit revival of a time-barred debt merely by listing it on bankruptcy schedules and sustained the objection, disallowing the claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether listing a time-barred debt on bankruptcy schedules revives the statute of limitations under SC law	Listing the debt does not constitute an unqualified promise to pay; therefore it should remain time-barred	Listing a debt (unsigned) on schedules without marking it “disputed” is a sufficient acknowledgment to revive the debt	Held: Listing alone does not revive the debt under SC law; revival requires an unqualified, unequivocal acknowledgement or written promise
Whether federal bankruptcy policy allows state-law revival based on schedules	Schedules are disclosure documents and may be amended; federal policy favors full disclosure and protects estate/creditors from post-filing debtor waivers — §558 preserves debtor defenses	Revival by schedules would undermine bankruptcy disclosure policy and unfairly benefit sleeping creditors	Held: Federal bankruptcy principles (including §558) counsel against allowing revival by mere scheduling; claim disallowed
Whether omission of marking a claim as “disputed” is an unequivocal promise to pay	Omission is not an unambiguous admission to pay; schedules routinely include debts obtained from imperfect records and can be amended	Failure to mark “disputed” is a binding admission under penalty of perjury and revives the debt	Held: Omission is not an unequivocal promise to pay and does not revive the debt; schedules’ omission carries no automatic revival effect

Butner v. United States, 440 U.S. 48 (1979) (property and creditor rights in bankruptcy are defined by nonbankruptcy law absent a federal interest)
Raleigh v. Illinois Department of Revenue, 530 U.S. 15 (2000) (bankruptcy burden-shifting does not displace governing state-law allocation of burdens)
Falwell v. Roundup Funding, LLC (In re Falwell), 434 B.R. 779 (Bankr. W.D. Va. 2009) (proofs of claim create prima facie evidence; burden-shifting on objections)
Superior Crewboats, Inc. v. Primary P & I Underwriters (In re Superior Crewboats), 374 F.3d 330 (5th Cir. 2004) (failure to disclose assets can give rise to estoppel/judicial estoppel in bankruptcy)
In re Seltzer, 529 B.R. 385 (Bankr. M.D. Ga. 2015) (collecting cases rejecting revival of time-barred debts merely by listing them on bankruptcy schedules)
In re Hess, 404 B.R. 747 (Bankr. S.D.N.Y. 2009) (recognizing the debtor/estate may assert statutes-of-limitations defenses)
Cross v. Stackhouse, 212 S.C. 100 (S.C. 1948) (distinguishing acknowledgment before vs. after limitations period; requiring unequivocal admission to revive a barred debt)
In re Mazyck, 521 B.R. 726 (Bankr. D.S.C. 2014) (statute of limitations bars remedy but not the underlying right to payment)