Legal Definition of a Creditor
If a debtor decides to declare bankruptcy, the court informs the creditor. In some bankruptcy cases, all of the debtor`s non-core assets are sold to pay off debts, and the receiver repays the debts in order of priority. A secured creditor has a special legal right in, in particular, the debtor`s assets in order to insure the debtor against repayment of the debt. A creditor who benefits from the protection of a lien or hypothec is guaranteed. A principal creditor is the party that has a claim against the debtor that is much higher than the debt owed to another creditor and, in some cases, to all other creditors together. Some consumer debt issues may be dealt with in Small Claims Court, such as minor settlement disputes. But for larger or more complex disputes with a creditor, perhaps repossessing a car despite your payments, it`s often worth hiring a lawyer. In many cases, a lawyer will only collect payment if you win your case. If a debtor is unable to repay their creditors, they may choose to declare bankruptcy. In such a case, the assets that a creditor may recover are subject to the insolvency law. In insolvency proceedings, all creditors of a debtor are listed according to the type of debt they hold.
The debtor`s assets, which are subject to bankruptcy proceedings, are then allocated to the list, with the lower debt receiving no proceeds until the higher-ranking debts are paid in full. For example, all creditors with first-ranking claims are paid before all creditors with non-priority claims. The law of debtor-creditors governs situations in which one party is unable to pay a pecuniary debt to another. There are three types of creditors. First, those who have a lien on a particular piece of land. This asset (or the proceeds of its sale) must be used to repay the debt owed to the secured creditor before it can be used to repay debts owed to other creditors. A privilege may arise by law, agreement between the parties or legal proceedings. See, for example, secured transactions and mortgages. Second, a creditor may have an overriding interest. A priority stems from the law.
If a creditor has priority, its debt must be paid if the debtor becomes insolvent before other debts. For example, Congress has prioritized debt over the federal government. See Federal Tax Lien Act. The last type of creditor is one that has no lien over the debtor`s assets and is not subject to any legal precedence. A creditor is a person (or company) to whom an obligation is owed. Most often, the obligation due is an obligation to pay money for certain previous services or to repay a loan. The person who has an obligation to a creditor is called a debtor. You may want to consider hiring a lawyer if you have a dispute over credit card debt that cannot be resolved by contacting the financial institution. Or maybe you`ve been rejected because of your skin color, gender, or other protected trait. A debtor-creditor lawyer can also help you rebuild your credit by helping you choose a reputable credit counselling service and better understand your consumer rights. Tax debts and child support generally have the highest priority, along with fines, overpayments of federal benefits and a handful of other debts.
Unsecured loans such as credit cards have priority last, giving these creditors the least chance of recovering money from debtors during bankruptcy proceedings. A general creditor, or a creditor in general, is a natural person who has no lien or security right in the debtor`s assets. Borrowers with good credit scores are considered low risk to creditors and, therefore, these borrowers benefit from low interest rates. In contrast, borrowers with low credit scores are riskier for lenders, and creditors charge them higher interest rates to meet this risk. A subordinated creditor is a creditor whose right to recover money from one debtor is subordinated to that of another person who also has the right to collect payment of another claim from the same debtor. The person with the principal payment claim is called the principal creditor. Bankruptcy is governed by a federal law that replaces the State Debtors and Creditors Act, if any. See bankruptcy CREDITOR, persons, contracts. The creditor is the one who has the right to demand the performance of an obligation.
or contract. (2) Creditors may: may be divided into personnel and real. 3. The former are so called because their claims are mainly directed against the person who can only reach the assets of their debtors; Under the general rule, according to which the one who is personally obliged to fulfill his obligations with all his assets acquired and to acquire, which is a common guarantee for all his creditors. 4. The latter are classified as real because they have mortgages or other security that bind the immovable property of their debtors. 5. It is true that personal creditors may initially be divided into two classes, namely those entitled to all the assets of their debtors, regardless of the origin or nature of their claims; secondly, those who, under a provision of the law, enjoy a special privilege, either in the mode of collection or in the rank they must occupy among creditors; They are preferentially entitled. An example is the case of the United States; If they are creditors, they always have a preference for insolvent estates. 6. A creditor sometimes becomes unknown to its debtor, as is the case when the debtor receives an assignment of the exchange; Paper whose title can be transferred either by endorsement or, in some cases, by simple delivery.
But in general, it is important that there is a contractual relationship between the parties. Empty, in general, 7 wine. ABS. 42; 3 Com. Dig. 343; 8 Com. Dig. 388; 1 ves. Jr.
302 2 Sup. bis Ves. Jr. Code 305, 7, 72, 6; Nos. 8, 18; Excavations 42, 6, 17; Nov. 97 chap. t3 Bouv. Inst. Index, h.t. Consult FindLaw`s directory of debtor-creditor lawyers to find one near you. A judgement creditor is a party who has gone to court and obtained a judgment against the person who owes his money.
If the creditor obtains an attachment order, he becomes the creditor of the attachment. For businesses, a lawyer practicing this type of law can help businesses make loans, collect debts, or better understand laws and regulations that protect both consumers and businesses (including the Fair Debt Collection Practices Act). However, small businesses typically hire more general practitioners to handle a variety of legal issues, including credit and debt issues. Are you a lawyer? Visit our professional website » A foreclosed creditor is a person who has received a garnishment order from a court to order a sheriff to seize the property of a debtor who has defaulted on repayment of an unpaid obligation so that the property can be used to satisfy the creditor`s claim.