Welcome to our blog! At Windtberg & Zdancewicz, PLC, we focus on creditor’s rights. What are creditors’ rights? The law is designed to protect creditors by providing them the ability and certain methods to collect what is owed to them. The methods available to creditors vary from state to state, but generally they include the following:
• file a lawsuit to obtain a judgment against the debtor
• place a lien on the debtor’s property or assets
• seizure and forced sale of property or assets
• garnishment of debtor’s wages or bank account
• foreclosure of real property
The rights of creditors can depend on the type of debt owed, terms of the loan, and the documentation evidencing the debt. Not only do creditors have rights against the debtor, but they also have rights against other creditors. When several creditors are attempting to collect from the same debtor, the law provides a priority amongst the competing creditors.
In short, creditors are either secured or unsecured. A secured creditor is one that the debtor pledged an asset to as collateral to support the loan. If the creditor has a “perfected” security interest (which means they established a public record of the debt), they have priority to that asset. Typically, creditors follow the rule that first in time is first in right. Unsecured creditors are the most common form of debt owed, including credit card bills and medical bills.
If you are interested in learning more about the rights of creditors, please check back and read our blog each week. Also, feel free to call Windtberg & Zdancewicz, PLC, and schedule an appointment today!