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Common Concerns & Questions About Bankruptcy

What creditors can do to debtors facing debts

| Jul 9, 2017 | Creditors' Rights |

Millions of Americans throughout the country, including many from Tyler, Texas, and the surrounding area, finding themselves in debt and suffering from financial difficulties. Regardless of the reasoning, whether it was a lost job, a serious injury or illness, or simply poor decision-making or excessive spending, if you are suffering from financial turmoil and are being hounded by debt collectors, life can be stressful. It is important to recognize, however, that creditors, in an effort to get debtors to pay back what they owe, are still entitled to certain rights.

There are several forms of “self help” remedies that creditors may try to get debtors to pay back what they owe. Secured transactions involve documentation that allows a creditor to take back or simply collect a debtor’s property in order to pay off a debt. This is generally the process used during the sale of a home or a car, but may also be obtained through paperwork where the creditor’s security interest is perfected.

A creditor may initiate court proceedings and even could seize property before the court even makes a ruling, though this is typically for extraordinary measures and is quite rare. Instances when this may occur are if the assets are perishable goods or goods that would be expected to decline significantly in value as time goes by. Other legal methods of collecting debt include a replevin action where property is repossessed until it is repaid, attachment proceedings which could occur if it is believed that the debtor may dispose of the property or assets, lawsuits or liens to collect the property, or even an involuntary bankruptcy proceeding against the debtor.

It is important to have a full understanding of what creditors can and cannot do when it comes to debt repayments. Although there are creditors’ rights that are honored in the court of law, it is not uncommon for creditors to bend these rules in an effort to bully or persuade debtors into uncomfortable and possibly illegal situations. During such times, it might be wise to speak with a law firm to learn whether any laws have been broken and to protect yourself.

Source: “Creditors’ Rights and Collection Options,” Accessed on July 6, 2017