Creditor and Debtor

What is Creditor & Debtor Law?

Debtor & Creditor law governs situations where one party is unable
to pay a monetary sum to another. Creditor & Debtor law is governed
by the principle of indebtedness. Indebtedness exists where a person is
under a present legal obligation to pay in the present or a future time
to another person a sum of money. The person with the legal obligation
to pay the sum of money is called the debtor while the person who is owed
the monetary sum is called the creditor.

Types of Creditors:

Generally, there are three main types of creditors. First, there are
those creditors who have a lien against a particular piece of property.
This particular piece of property (or proceeds from its sale or foreclosure)
must be used to satisfy the debt to the lien-creditor before it can be
used to satisfy debts to any other creditors. A lien may arise many different
ways, such as through statute, agreement between the parties, or judicial
proceeding. Second, there are creditors who have a priority interest.
A priority interest usually arises through statutory law. If a creditor
has a priority interest than his debt must be paid when the debtor becomes
insolvent or before any other debts are paid to secondary creditors. The
third and final type of creditor is one who has neither a lien against
the debtor’s property or is the subject of a statutory priority.

Creditor Remedies:

There are many ways a creditor can have debts owed to them satisified.
Creditors use judicial and statutory processes to have debts satisfied.
The first remedy, is called Attachment. Attachement, is a limited statutory
remedy whereby a creditor has the property of a debtor seized to satisfy
an existing debt. The second remedy is called Garnishment. Garnishment,
allows a creditor to collect part of a debt (debtor’s wages) to satisfy
the existing obligation. The third remedy is called Replevin. Replevin,
allows a creditor to seize personal goods that the debtor has a property
interest in, to satisfy the existing debt. The fourth remdey is called
Receivership. Recivership, involves the appointing of a third party by
a court of law to dispose of the debtor’s property in order to satisfy
the existing debt. Creditors commonly seek to create a lien on a debtor’s
property through a judicial process of lien creation, which is governed
by state law. Once a lien has been created, state statutory law governs
how the lien is executed against the debtor’s property. The sale of property
subject to a lien to satisfy the debt is also governed by state statutory
law. Federal and state statutes, and the Federal Consumer Credit Protection
Act also limit the type of property that can be used to satisfy a debt.

Debtor Remedies:

A debtor has potential remedies against exisiting creditors as well.
One type of remedy is called bankruptcy. Bankruptcy, is defined as the
legally declared inability or impairment of ability of an individual (debtor)
or organization to pay its existing creditors. Simply put, bankruptcy
is a way for individuals and business who are overwhelmed by debt to discharge
their existing debts or reorganize their debts and start fresh. Creditors
may file a bankruptcy action against a debtor (known as an involuntary
bankruptcy) in an effort to recoup a portion of what they are owed or
initiate a restructuring of payment owed to them. In most cases, bankruptcy
is usually initiated by the debtor (know as an voluntary bankruptcy) that
is filed by the insolvent debtor or organization) to absolve debts or
monetary obligations to exisiting creditors. Bankruptcy proceedings take
place in bankruptcy courts. Bankrputcy court is a type of federal court
that has jurisdiction over bankruptcy cases in the United States. A speical
federal bankrputcy judge is appointed to preside over the hearing. It
is important to note that bankruptcy cases cannot be filed in state court,
though some state courts may hear bankrputcy proceedings in certain situations.

Attorneys specializing in Creditor & Debtor Law:

Attorneys specializing in Creditor & Debtor law must have insight
and knowledge in areas such as Bankruptcy Law, Property Law, Tax Law,
Commercial Law, Consumer Law and many other legal areas that govern the
existing legal obligations between potential creditors and debtors. Attorneys
who practice Creditor & Debtor law usually work in bankruptcy realm
and they help their clients absolve their existing debts or help create
payment plans to ease their financial burdens against existing creditors
.Its important to note that these Creditor & Debtor attorneys represent
their clients in all matters involving monetary obligations owed to third
parties.

Individuals looking for an attorney specializing in Creditor & Debtor
law need to find someone who is well versed in the United States Bankruptcy
Code (Title 11 of the United States Code) and the Federal Rules of Bankruptcy
Procedure. A good attorney specializing in Creditor & Debtor law will
also understand these subtle differences between the many different bankruptcy
chapter filings (Chapter 7, 9, 11, 13, etc.) and apply the appropriate
rules and regulations in preparing the appropriate case, negotiating the
right settlement, or presenting the correct evidence and arguments in
pursuing the proper course of action for a potential creditor or debtor.

CLICK HERE TO SPEAK WITH AN ATORNEY IN YOUR AREA WHO SPECIALIZES
IN DEBTOR AND CREDITOR LAW

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