Understanding the Rights &
Limitations of Creditors
Sept. 30, 2022
According to the most recent statistics from the Federal Reserve Bulletin, about 77% of American households have at least some form of debt. Creditors and debt collectors have the right to interact with consumers and debtors reasonably to recover outstanding debts. However, they are not permitted to employ intimidating and deceptive methods when dealing with consumers.
If you're exploring your options for financial relief and want to understand creditors' rights and limitations, consulting with an experienced Georgia debt relief attorney is crucial. Pytte Law is committed to offering comprehensive legal guidance and reliable advocacy to clients in bankruptcy and debt relief matters.
As your legal counsel, I can work to understand your unique financial situation and enlighten you about your possible legal options to achieve financial relief. My firm is proud to serve clients across Savannah, Hinesville, Richmond Hill, Statesboro, Effingham County, Long County, and Chatham County, Georgia.
Consumer Rights Laws
Consumer rights laws are designed to protect consumers against dishonest business practices and defective products and services. These laws seek to hold businesses accountable for taking advantage of consumers' ignorance. Here are some federal and state consumer rights laws:
Fair Debt Collection Practices Act (FDCPA)
According to the federal Fair Debt Collection Practices Act (FDCPA), it is illegal for debt collectors, creditors, and third-party collection agencies to recover debts from consumers using any unfair, false, unconscionable, abusive, and harassing methods or misleading representation.
Fair Credit Reporting Act (FCRA)
The federal Fair Credit Reporting Act helps to ensure fairness and accuracy, while maintaining the privacy of all consumer information collected by reporting agencies, including the credit bureau. The act regulates the approach used by credit reporting agencies to collect, use, access, or share consumer information available in their reports.
The Georgia Department of Law’s Consumer Protection Division has enacted various laws that protect consumers and legitimate businesses across the state from deceptive, unscrupulous, unfair, and illegal practices involving transactions in the marketplace.
As mentioned earlier, the federal FDCPA protect consumers from the misleading, abusive, harassing, and other illegal debt collection practices of creditors. Hence, when trying to recover debts in the state of Georgia, the debt collector or collection agency must:
Interact with the debtor reasonably
Avoid using false statements or misrepresentations
Not harass the debtor through continuous calls, demand letters, or threats of violence
Not contact the debtor at an inconvenient place or time
Not issue arrest threats to the debtor
Not pretend to work for a public or government agency
Not shame consumers publicly into paying the debt
Not call the debtor at an unusual place or time
Also, the creditor or debt collector should only reach out to an attorney representing the debtor.
Filing a Lawsuit
According to Georgia law, a creditor or debt collector may be eligible to file a lawsuit against a debtor to get a civil judgment for the debt owed. If successful, the Georgia court will allow the creditor to garnish your wage – up to 25% of your weekly disposable income.
Alternatively, the creditor may seek a civil judgment requesting the court to place a lien on your property. With a lien on your property, the creditor may have a legal right or claim against the property until you repay the debt. In some cases, the debt collector may force the sale of the property and settle the outstanding debts using the net proceeds from the sale.
Bankruptcy Effects on Creditor's Rights
Under Georgia bankruptcy law, once a debtor files for any bankruptcy option, creditors and debt collection agencies must stop all forms of debt collection efforts immediately. After filing your bankruptcy petition, an "automatic stay" order goes into effect.
The automatic stay is a federal court injunction that prevents creditors and debt collectors from reaching out to consumers who have filed for bankruptcy. The injunction clearly prevents the debt collector from:
Sending emails, texts, or demand letters
Foreclosing your home
Repossessing your collateral
Placing a lien on your property
Filing or continuing a lawsuit
Additionally, the automatic stay order will protect the debtor from all kinds of creditor harassment, such as constant phone calls, demand letters, frequent texts, and emails. Generally, it is unlawful for a creditor to harass you once you have petitioned for bankruptcy.
Recourse Options When Creditors
Aren't Respecting Discharge
In the event that the creditor or debt collector ignores the automatic stay order, disrespects your bankruptcy discharge, or continues to harass or call you repeatedly, you should inform your bankruptcy attorney straight away. Your lawyer will help protect your legal rights and take necessary legal action against the noncompliant creditor.
Let Pytte Law Help You
When overwhelmed with debt, bankruptcy is among the available options to achieve financial relief and stop creditor harassment. However, there are several complicated processes involved in filing for bankruptcy in Georgia. Therefore, consulting with an experienced bankruptcy attorney is crucial to explore your options for financial relief and help you make intelligent decisions.
At Pytte Law, I have the knowledge and resources to assist and guide clients through the complex procedures involved in bankruptcy. As your legal counsel, I can evaluate your financial situation to determine the ideal bankruptcy chapter for you. Also, I will guide you through the filing process, handle any ongoing creditor harassment, and help you achieve a fresh financial start.
Contact my firm – John E. Pytte | Your Georgia Debt Relief Specialist – today to schedule a simple case assessment with an experienced lawyer. I can offer you the detailed legal counsel and personalized advocacy you need to navigate crucial decisions in your case. My firm proudly serves clients across Savannah, Hinesville, Richmond Hill, Statesboro, Effingham County, Long County, and Chatham County, Georgia.