Debtor-creditor Relationships

MEMORANDUMDATE : May 21 , 2007TOFROMRE : Debtor and Creditor Cornell Law School healthy Information InstituteHYPERLINK http / entanglement .law .cornell .edu /wex /index .php /Debtor_and_creditor http /www .law .cornell .edu /wex /index .php /Debtor_and_creditor ARTICLE SYNOPSISThis article provides a comprehensible overview and summary of the legal aspects of the debitor-creditor relationship . Included are the definitions for the type of creditor as well as s of variediate and federal laws colligate to the debtor and creditor . Also included are references for further informationLEGAL ISSUESThree of the important legal issues addressed in this article are as follows (1 ) the definition and status of creditors (2 ) the distinction between judicial and statutory laws affecting the rights and relationships of debtor and creditor and (3 ) the distinction between federal and realm law application to the debtor and creditorThere are three different types of creditors . A secured creditor , or lien holder , has the security of a legally enforceable claim against specific property for a debt . The near common are car loans and home mortgages where the creditor holds the patronage to the property Businesses may hold liens against a variety of properties for a security interest in a loan . This is the most secure form of creditor position Next is a creditor who has a priority interest created by law , such as the Internal Revenue Service . These creditors are second in extraction in the event the debtor s assets are liquidated as in some forms of loser . The last in line is the unsecured creditor , who has made a loan simply on the good faith in the borrowerThe federal government as well as the individual states has enacted a variety of laws regarding debtor creditor relationship these laws created by state or federal general assembly are called statutes or principles Most common are state statutes regarding liens and foreclosures and federal law such as the bankruptcy commandment .

Additionally , both state and federal courts review the respective(prenominal) law of their legislative branches creating judicial law or help . The courts can consider the constitutionality of debtor-creditor laws as well as some other issues such as the application and enforceabilityThere are two profound areas where federal law overrides any state law : bankruptcy and the collection of debts . The bankruptcy code is designed to provide an ly and administer method to liquidate a debtors assets and /or coordinate refund to debtors . The Fair Debt Collections Practices Act is designed to provide and regulate the actions of anyone compound in the collection of debtManagerial PerspectiveThese issues are extremely important to affair . Management should determine if any outstanding loans are secured , and what tribute exists if such loans are in the form of equipment or memorial Management should have knowledge of the Fair Debt Collections Practices Act and be sure anyone attempting to collect a debt is given specific culture on how to legally do so . Management should in any case have a working knowledge of the bankruptcy code to understand what protection could be...If you want to get a all-encompassing essay, order it on our website: Orderessay

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