What Actions Can a Creditor Legally Take and What Actions Are Illegal?

If you owe a debt, as a consumer you are afforded certain legal protections which limit what actions a creditor can perform in order to collect money owed. On the other hand, creditors also have rights available to them which allow for legal recourse in cases of outstanding debt. Matters of debt collection and consumer protections can be complex and if you are being contacted by creditors, it is important to know what creditor actions can be legally taken, and which actions are strictly illegal.

Creditor Actions Prohibited by Law

Under the Fair Debt Collection Practices Act (FDCPA) established in 1978, you may not be harassed by creditors as a tactic for debt collection. Although prohibited by law, many collection agencies still persist in this unethical behavior.

The FDCPA protects consumers from creditors who engage in behavior including:

  • Calling a debtor at impermissible hours such as before 8 AM and after 9 AM or continually and with the intent to harass.
  • Contacting or repeatedly attempting to contact the friends, relatives, or employer of a debtor to discuss specific and private financial matters.
  • The knowing misrepresentation or fraudulent expression of a debt or terms of a debt as a method of collection.
  • Contacting a debtor directly after it has been made clear that legal representation for the debt owed has been obtained.
  • Attempted collection of debts which are not owed, or have already been paid.

If you are being constantly disturbed by creditors or feel as though you have been a victim of creditor harassment, it is vital to contact an attorney as soon as possible. Depending on your situation, there may be several legal options available to you, including litigation and legal compensation.

What Can a Creditor Legally Do?

New York State provides many protections for debtors, however, a creditor still has rights and may pursue several legal actions towards the collection of the money owed. If the initial attempts to collect a debt are continually unsuccessful, a creditor can sue a debtor in court to obtain a judgment. A judgment is a document stating the legal recognition of a debt and its terms. If successful, a creditor is given the title of “judgment creditor” and will be granted several legal options for collections not otherwise available.

Methods legally available to a Judgment creditor Include:

  • Depositions and investigations: Debtors may be subject to legal investigations which must be responded to under oath and by law. Many times this will include financial information such as the extent of assets owned and expected income.
  • Garnishment: A debtor can request a garnishment on bank account funds allowing access to money in order to secure payment of the debt. New York sets limits on the amount in a given bank account which can be frozen for these purposes.
  • Judgment liens: A creditor can also attach a lien to a property owned by a debtor as a method of securing payment. When this property is sold, the creditor is entitled to payment derived from the money obtained through the sale. In New York, a lien can be attached to real estate, such as houses and land as well as to personal property such as paintings and other valuables.

Should I Contact an Attorney?

If you think you may be subject to illegal creditor harassment, do not hesitate to contact our knowledgeable Queens bankruptcy attorney. Our lead attorney has more than 25 years of legal experience and in-depth knowledge of the circumstances and laws surrounding bankruptcy, the FDCPA, and debtor-creditor disputes. Attorney Bronson has maintained an AV® rating from Martindale-Hubbell® (the highest an attorney can achieve) for more than two decades.

Call (888) 900-6057 today and talk to a lawyer about your legal options.

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