Debtor-creditor laws broadly deal with issues stemming from the debtor-creditor relationship. Debtor-creditor law is closely related to bankruptcy law. Collections law falls under the scope of debtor-creditor law. Debtor-creditor law provides a venue of relief and reimbursement for creditors. When debtors fail to repay their debts, a creditor can file a debt collection lawsuit to force repayment through asset seizure, wage garnishment, or other means. Debtor-creditor law also gives protection to debtors from illegally aggressive and abusive tactics some creditors engage in to collect a debt. The Fair Debt Collection Practices Act (FDCPA) is a federal statute that provides a minimum level of protection for debtors against unfair, abusive, and deceptive practices by debt collectors (in regards to certain types of debt).
Debtor laws serve the purpose of both ensuring protection for debtors while also acknowledging creditor rights to collect. One method for debtors to settle their obligations to creditors is by filing for bankruptcy. Bankruptcy law provides a legal process for debtors to settle their debts with creditors without leaving debtors with nothing to survive on. The two different types of bankruptcy available to individuals are Chapter 7 and Chapter 13 bankruptcy. A bankruptcy lawyer can provide guidance to a debtor as to which type of bankruptcy is most viable for their situation.
In the debtor-creditor relationship, there are also creditor rights to consider. Debtor laws provide several methods in which creditors can assert their claims for repayment of debt. Creditors can use security interests and liens as means of forcing a debtor to repay their debt. A security interest can be thought of as a collateral that the borrower provides as guarantee of timely payment of debt. Liens are often also security interests and generally can be used as partial repayment of debt. A security interest is usually an interest in goods, whereas a lien will more often refer to an interest or collateral in real property, like land. There are many different types of liens including mechanic’s liens, maritime liens, and tax liens.
Debtor-creditor lawyers often work with businesses, both large and small, as well as individuals. Lawyers specializing in debtor-creditor law will assist businesses in determining how to extend credit as well as collect on debts. They can offer guidance to creditors on the legal means of seeking repayment of debt, without filing a lawsuit. They also advise consumers on their rights under the law. If necessary, debtor-creditor lawyers can help businesses or creditors bring suit against a debtor to force repayment.
Since the passage of the Fair Debt Collection Practices Act, there are many limitations and restrictions placed on creditors and debt collectors when trying to collect a debt. Failure to abide by these regulations can have serious consequences for a creditor. A debtor-creditor lawyer can advise creditors on a course of action within the bounds of the law. Additionally, a debtor-creditor lawyer can help a creditor bring suit against a debtor for repayment or negotiate with the debtor on behalf of the creditor to find an amicable solution to the debt.
For debtors, a debtor-creditor lawyer can protect your rights against deceptive or abusive practices that some debt collectors and creditors engage in. Further, a debtor-creditor lawyer can work with you to find a solution to your debt problem. A debtor-creditor lawyer may suggest filing for bankruptcy as a means of alleviating yourself of debt. In such situations, a debtor-creditor lawyer may recommend the services of a bankruptcy lawyer.
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