It’s a pity but most of us have no idea about their rights. Especially when it comes to debts and credits. Even creditors are often puzzled by the regulations of their secured and unsecured claims. That is why we have decided to discuss the main creditors’ and debtors’ rights. This information will help you to resolute most disputes informally or defend your rights in courts. Nevertheless, never refuse the legal expert’s assistance. This is the best way to reach the case and not lose anything.

Creditors’ Rights for Secured and Unsecured Claims

It is worth noting that there are secured and unsecured creditors. Their rights depend on the type of credit they issue. That is why secured creditors have a range of their rights that are based on mortgages and security agreements. This way the personal property of a debtor becomes the main security matter for a creditor. The secured creditor has the following rights in relation to debtors:

  • Creditors have the right to receive value equal to the debt in case of the security agreement and a judgment lien.
  • Creditors are able to stop debtors from using cash collateral. They can collect assets from a trustee’s use as well.
  • Creditors can ask the court to determine the replacement value. This procedure is required if the replacement value cannot be determined by debtors and creditors informally.
  • Creditors have a right to ask for the reorganization plan and the debt paying off in case of the debtor’s bankruptcy.

We should mention that secured creditors obtain rather more rights. We tried to specify the main ones that are essential for creditor-debtor relationships. If you are a creditor, pay attention to the legal regulations and changes to the laws that control your activities.

You always should take care of the juridical protection. For this purpose, find an experienced lawyer and entrust him/her to your case. It is recommended to consult with a competent attorney 1-2 times a quarter even if you do not have disputable situations.

Unsecured Creditors’ Issues

Medical and card debts are very popular nowadays. Nevertheless, unsecured creditors have fewer rights than secured ones. This category of creditors is called the low-priority group. To protect your rights as the unsecured creditor, you need to pay attention to the debtors’ claims and their bankruptcy papers. Sometimes a wide range of inaccuracies takes place. Debtors can provide fake documentation to avoid payments.

That is why legal assistance is required for unsecured creditors. Attorneys will help you to get the court’s approval to take the debtor’s deposition. In some cases, the first-class lawyers can prove the fact of the debtors’ illegal activities. For example, when the debtor provides “a piece of cheese”. If you are interested in getting paid back the full sum of the debt, legal services are your ideal solution.

Main Debtors’ Federal and State Rights

The debtor has the right to claim about abusive and unfair actions of the debt collectors and deceptive tactics of their creditors. Even in case of some dispute situations, the debtor cannot be pinched by the crediting organization or collectors’ organizations. This is the main right you should remember. Inform about the fact of abuse or unfair behavior against your interests and the well-being of your family members.

The debtor is able to seek adequate communication from the creditor’s side (written notifications, demand letters, calls, personal meetings, etc.). These rights are related to the section of federal legal regulations. Speaking about state debtors’ rights, these legal practices and laws aim to regulate and protect any debt activities that take place interstate. Among the main state debtor’s rights are:

  1. Time-barred defaults on a payment. If the creditor does not send notifications about deadlines and extra percent for the debt defaults, the debtor can ask the court to approve the fact that the extra charge is time-barred.
  2. If the creditor does not inform about pay-off deadlines, the debtor also has a right not to pay extra interests.
  3. If the creditor does not have a license and you prove this fact in court, your debt and defaults on a payment can be voided. Additionally, you can claim for exorbitant interest rates.
  4. Sometimes creditors change the policy and set too high-interest rates that exceed the state’s interest rate. Your creditor can be fined, and you will have compensation or annulation of debt defaults.
  5. Note that collector’s activities are usually illegal. Some companies obtain licenses but their tactics are far from relations between creditors and debtors governed by the law.

Contact your attorney to resolve the dispute and protect your rights, money, property, family. A skillful legal expert is able to prove the fact that debted assets are the result of identity theft. Or, for instance, your debt is too old – time-barred. Find out more about your legal protection!

Stay tuned to our blog publications. We try to highlight the most useful facts and news in our articles for you. Our legal experts are able to defend your rights in court or even invalidate your agreement with a creditor which violates the debtors’ rights and regulations for the creditor-debtor relationships.