Debt is amount of money owed by an individual to an organization. The money owed will be the principle plus accrued interest as agreed upon by both parties at the time of transaction. There is also a written legal agreement document authenticating the deal as legal.
The person who has borrowed the money is called a debtor and the lending organization or a private individual becomes a creditor. A debt which can not be recovered under any circumstances is termed as bad debt in the books of accounts.
There are several types of debts and several organization deals in one form of debt or another:-
1. Secured- the amount is lend against an asset whose value is equal to or more than the amount lend;
2. Non-secured- No securities are taken;
3. Private- loan for consumption purposes like- home loan, personal loan, etc.
4. Public- borrowing by state or federal government rather than raising the same amount via taxes. Government bonds can be cited as example.
5. Syndicated- a loan taken by a company
6. Bilateral- when one nation is creditor and another is debtor.
The collection related matter is not referred to a somekeyword initially. The initial responsibility is vested in a collection agency and/or the internal collection department of the organization.
If the debtor is unwilling to payback, it is time to turn towards a legal course of action. Initially for claims less than $5000, a suit is filed in a small claims court. In such case a lawyer is not required.
In case of legal agencies, they have to initially prove that the agency owns the debt with the help of evidences. The creditors also need to prove with the help of evidence that you have borrowed the money. The creditors are also bound to verify the authenticity of the debt amount claimed by them.
As many entities resort to illegal practices, it becomes imperative to protect the debtors. As a result the Fair Debt Collections Practices Act (1978, title-8) came into existence as subpart of Consumer Credit Protection Act. It is used alongside Fair Credit Reporting Act. Several US states too have their state level laws in this domain.
A collection lawyer is a person who is an expert in this section of legal matter. A lawyer would be a best person to tell a plaintiff/defendant on whether to sue or use credit counseling to ease the situation.
Federal Trade Commission has already said that consumer complaints related to debt top their list of complaints. It is prudent to seek legal help from a Collection Attorney, he is the person who will help you out with useful advices as well as in negotiations.
If you are looking for a New York based reputed lawyer, please visit somekeywordNew York Attorney Directory to get the required information.
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