Find a Debtor Creditor Lawyer

A debtor is a person who owes another entity (creditor) money. Both federal and state laws have been established regarding debtor-creditor scenarios. With the exception of bankruptcy proceedings, enforcement of these laws falls under the jurisdiction of state courts. Attorneys represent either debtors or creditors in resolving debt disputes.

Understanding the Laws and Your Rights

Consumer Credit Protection Act This act prohibits employers from discharging employees whose wages have been garnished for a debt. It also limits the amount of employee earnings that can be garnished in a one-week period.

Fair Credit Reporting Act This legislation was established so that credit agencies can be required to furnish businesses with correct, complete information to use in determining a consumer's creditworthiness. It also regulates confidentiality procedures within credit bureaus. Moreover, this is the statute that now governs identity theft.

Fair Debt Collection Practices Act This act prohibits unfair and deceptive collection practices by third-party debt collectors.

Truth in Lending Act (and Regulation Z) This law states that accurate disclosure of charges and terms of credit must be provided to a consumer before consummation of the transaction. The annual percentage rate, finance charges, and whether credit insurance is mandatory are examples of such terms.

Home Ownership and Equity Protection Act
In connection with high rate or high fee loans, this law prohibits balloon payments due in less than five years. It also protects the consumer from prepayment penalties and rate increases in case of default; it also requires a warning that the borrower could lose the home in case of failure to make payments.

Equal Credit Opportunity Act This legislation prohibits discrimination (based on race, color, religion, sex, marital status, age) in a credit transaction.

Uniform Fraudulent Transfer Act Debtors are prohibited from transferring their property to someone else as a means of having it seized by a creditor.
Types of Creditors

A priority interest creditor has priority over all other creditors when a debtor becomes insolvent and files bankruptcy. An example of a priority creditor is the Internal Revenue Service which demands that all federal debt (such as taxes) must be paid first. First-lien creditors, such as mortgage lenders, have priority over other creditors when the debtor's property is sold and proceeds are paid. The most frequent type of creditor has no lien or priority interest. Examples of this type of creditor are car loan lenders (and their collectors) or credit cards companies (and their collectors).

By Kathleen Goolsby           

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