In the past, we’ve covered a lot of topics dealing with debtor’s rights and options, but it’s important to note that creditors have options, too. Creditors are the entities to which money is owed — including banks, credit card companies and other lenders. While the way a creditor can collect debt depends in part on your agreement with them, most creditors have some common rights.

First, a creditor has the right to expect that they will receive payment when they lend money. They also have the right to pursue that payment via reasonable billing methods that include sending you mailed or electronic statements and making phone calls. Creditors must follow laws regarding appropriate collections practices when doing these things.

If payment isn’t received, creditors have a right to escalate collections. In cases where property is collateral for the loan — such as with car loans — creditors usually have the option of seeking a return of the property in lieu of payment. This action is known as repossession.

Creditors can also file a lawsuit, seeking a judgment against the debtor. A judgment can allow a creditor to seek payment via more aggressive methods, including in some cases garnishing wages or levying bank accounts.

While all of these rights of creditors can sound scary to someone who owes debt and is trying his or her best to protect his or her own interest while struggling to pay off loans, you as a debtor have rights, too. You have rights that can stop creditor harassment, and you have options that can stop the collections process while you reorganize finances. One of those options, which creates a viable payment plan for your debt, is Chapter 13 bankruptcy.

Source: FindLaw, “Creditors’ Rights and Collection Options,” accessed Feb. 12, 2016