• When to Call a Lawyer to Protect Your Creditor/Debtor Rights
  • July 28, 2017 | Author: James H. Gulseth
  • Law Firm: JGPC Business & Corporate Law - Pleasanton Office
  • In times past, creditors – that is, those who lent debtor’s property or services on a promise that the obligation would be paid – held considerable power over debtors. If a debtor failed to pay his or her obligation, there was little in the law to prevent the creditor from having the debtor thrown in jail, his or her property seized, and/or his or her family being forced or compelled to work in order to pay off the obligation. Thankfully, those days have passed: now, creditors as well as debtors both have rights they can exercise in the event a dispute about property or services erupts. While these rights can help ensure some of these disputes are resolved quickly, sometimes a creditor/debtor attorney will need to become involved in order to ensure these rights are protected.

    Typical Creditor/Debtor Rights in California

    A creditor has several rights both before an obligation is formed with a debtor as well as after the debtor has broken any agreement he or she may have had with the creditor. For example, the creditor has a right to decline to extend credit to a debtor (so long as the denial is not the result of unlawful discrimination) or to extend credit on nearly any terms as the creditor may choose (for example, the creditor may not charge unlawfully-high interest rates). When the creditor has broken his or her agreement with the creditor, the creditor may pursue a lawsuit against the debtor to recover not only the principal owed but also certain interest and fees.

    Debtors also enjoy certain protections under the law. For example, debtors are entitled to have the terms of the obligation explained to them before they are required to accept the obligation. When a debtor has broken an obligation, the creditor must follow certain notification procedures before attempting to collect the debt so that the debtor is assured that the debt being collected is, in fact, a valid debt. Finally, a creditor is prohibited from taking certain actions (like harassing the debtor or threatening actions which the creditor cannot legally take) while attempting to collect on the debt.

    When Do I Need a Creditor / Debtor Attorney?

    An attorney’s assistance and advice can be invaluable any time you are not sure of your rights or obligations as it pertains to a credit obligation, but you will certainly want to speak with a lawyer when a problem has arisen in the creditor/debtor relationship. The sooner you involve your attorney in the situation, the quicker your dispute can be resolved (and with fewer legal missteps that can cost you money and/or time, too!).