Most people know that debtors have rights when dealing with creditors. But what happens on the other end of the equation? Creditors have rights, too. The Mitchell Pollack & Associates PLLC legal team helps many of our creditor clients understand their right to collect outstanding balances.
There are several ways a creditor can recover money owed from loans, bills or other agreements. These methods, or “remedies,” may or may not require court intervention. Most creditors prefer to use the simplest means first.
If directly contacting a debtor does not work, many creditors turn to a collection agency as a first recourse. For most businesses, debt collection is not a top priority. It can be challenging for companies to keep up with collecting unpaid debts while managing their day-to-day tasks. By using a debt collection agency, the business can stay focused without giving up on collecting the money.
The law regulates debt collection agencies and their actions. If they violate these rules, debtors have grounds to push back. However, these rules may not apply to creditors collecting their own debts.
A secured transaction is a common method of money lending. Mortgages and car loans are typical examples of a secured transaction. If the debtor is unwilling or unable to pay the outstanding amount, the creditor recoups some of the debt by taking back the collateral property.
These remedies are just a couple of the methods creditors can use to collect outstanding balances. Visit our webpage to learn more about how the law protects creditors’ rights and debt recovery.