What is Debtor / Creditor Law?
Debtor-creditor law applies to all non-bankruptcy aspects of the relationship between creditors and debtors. One of the main goals of debtor-creditor lawyers is to keep their clients out of bankruptcy court. Issues include, but are not limited to, the proper procedures for extending credit; consumers' rights with respect to debt collection; and the different forms of credit satisfaction, such as liens and debt priority. An attorney who practices debtor-creditor law may specialize in small business and/or consumer issues, helping clients manage debt in order to remain solvent (see Using a Bankruptcy Attorney if you need to file for bankruptcy protection).
Terms to Know
- Contingent Claim: A claim that may be owed by the debtor under certain circumstances, e.g., where the debtor is a cosigner on another person's loan and that person fails to pay.
- Creditor: A person to whom a debt is owed; especially a person to whom money or goods are due.
- Secured Debt: Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default. Examples include home mortgages, auto loans, and tax liens.
Debtor-Creditor Law: Consumer
Some consumer debt issues can be handled in small claims court, such as minor billing disputes. But for larger or more complex disputes with a creditor, perhaps the repossession of a car despite having made your payments, it often pays to hire an attorney. In many cases, an attorney will collect payment only if you win your case.
You might consider hiring a lawyer if you are having a dispute over credit card debt that cannot be resolved by contacting the financial institution. Or perhaps you were turned down for credit because of your skin color, gender, or some other protected characteristic. A debtor-creditor attorney also may be able to help you rebuild your credit by helping you choose a reputable credit counseling service and better understand your consumer rights.
Debtor-Creditor Law: Business
With respect to business, an attorney practicing this type of law may help businesses determine how to extend credit, collect debts, or better understand the laws and regulations that protect both consumers and businesses (including the Fair Debt Collection Practices Act). However, small businesses typically hire more generalized attorneys to handle a variety of legal matters, including credit and debt issues.
To learn more about the various issues related to debtor-creditor law, see FindLaw's Financial Consumer Protection and Debt Relief sections.
Related Practice Areas
See FindLaw's directory of debtor-creditor lawyers to find one near you.