Understanding the Rights and Limitations of Creditors

Consumer debt in Montana is an unfortunate fact of life, and so are individuals who are out to collect that debt. Indeed, in the state of Montana, debt collectors and creditors are allowed to interact with consumers in a reasonable manner when trying to recover outstanding debts. However, they’re prohibited from using deceptive, threatening, or intimidating tactics to deal with debtors.

If you’re considering your options for debt relief and want to know creditors’ rights and limitations, it is crucial that you speak with a Montana bankruptcy attorney. At Geranios Law, PLLC, I have spent my career guiding clients in financial relief and bankruptcy-related matters. As your legal counsel, I can examine your financial condition, explore your options to achieve debt relief, and help you understand how you can avoid creditor harassment.

No one should have to experience harassment at the hands of debt collectors. My firm proudly serves clients across Missoula, Beaverhead, Bosman, Madison, Jefferson, Sanders, Ravalli, and Silver Bow Counties, Montana.

Consumer Rights Laws

Consumer rights laws have been established in Montana and across the United States to protect consumers against unethical business practices and defective products and services. Under these laws, any business owner that takes advantage of a consumer’s ignorance may be held liable. Here are some federal and state consumer rights laws:

Fair Credit Reporting Act (FCRA)

The Federal Fair Credit Reporting Act was enacted to ensure accuracy, and fairness, and maintain the privacy of all consumer information gathered by reporting agencies, including the credit bureau. The FCRA will control the methods used by credit reporting agencies to access, gather, share, or use consumer information that is available in their financial or credit reports.

Fair Debt Collection Practices Act (FDCPA)

Under the Federal Fair Debt Collection Practices Act (FDCPA), creditors, debt collectors, and third-party collection agencies are prohibited from recovering debts from consumers or debtors through any harassing, unfair, abusive, unconscionable, false methods, or misleading representation.

Montana State Law

According to the Montana Consumer Protection Act – Montana Code Annotated Section 30-14-103 – using “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.”

Actions That Must Be Avoided When Collecting Debt 

Under the FDCPA and applicable Montana state laws, debt collectors, creditors, or third-party collection agencies who are trying to recover outstanding debts must avoid the following actions:

  • Avoid interacting with the debtor unreasonably
  • Avoid misrepresentation or using false statements
  • Avoid calling the debtor at an unusual place or time
  • Avoid threatening to arrest the debtor
  • Avoid harassing the debtor through incessant calls, texts, demand letters, or emails
  • Avoid issuing threats of violence
  • Avoid contacting the debtor at an inconvenient time or place
  • Avoid disrespecting or shaming the debtor publicly into paying their debts
  • Avoid pretending to work for a government or public agency

Rather than using threatening, deceptive, or intimidating methods to deal with consumers, creditors can reach out to the debtor’s legal representatives, file a lawsuit, or seek a judgment lien through the court system.

Filing a Lawsuit

According to Montana law, a creditor or debt collector—one who is acting within the state’s statute of limitations—may be eligible to file a civil action against the debtor and seek a judgment to recover the outstanding amount owed.

However, keep in mind that Montana follows the federal wage garnishment law. Thus, if the creditor receives a successful judgment, they may be entitled to garnish the lesser of:

  • The amount that your weekly disposable earnings exceed 30 times the federal minimum hourly wage; or
  • 25% of your weekly disposable income.

Placing a Lien on Assets or Property

The creditor may seek a judgment lien asking the court to place a lien on the debtor’s assets or real property. A lien of this kind gives the creditor the legal claim or right on the property until the consumer repays the outstanding debt. Additionally, a judgment lien gives the debt collector the right to force the property sale. Once the debtor’s property has been sold, the creditor will receive a certain amount from net proceeds to cover the debt.

Bankruptcy Can Affect Creditor’s Rights

If you are experiencing overwhelming debt and creditor harassment in Montana, you may feel like there’s no way out—but it’s important to understand that your situation is far from hopeless. Filing for bankruptcy in Montana will activate an “automatic stay” order. This is a federal court injunction that prohibits debt collectors and creditors from contacting consumers who have filed their bankruptcy petitions.

Essentially, the automatic stay order prevents the creditor from:

  • Contacting or calling you
  • Sending text messages, emails, or demand letters
  • Placing a lien on your property
  • Repossessing your collateral
  • Foreclosing your home
  • Filing or continuing a lawsuit

The order protects debtors from all forms of creditor harassment, including frequent texts, phone calls, emails, and demand letters.

Recourse Options When Creditors Aren’t Respecting Discharge

If the debt collector or creditor violates or ignores the automatic stay order by continuing to call and harass you, you should notify your bankruptcy lawyer as soon as possible. Your attorney can help you protect your legal rights and take legal action against the disobedient creditor.

Consult an Attorney to Understand Your Options

When overwhelmed with debt, dealing with endless creditor calls can be infuriating. Thankfully, filing for bankruptcy offers a promising solution to achieve financial relief and stop creditor harassment. At Geranios Law, PLLC, I’m ready to help you find a path forward.

As your legal counsel, I can work to understand your unique financial situation, determine whether bankruptcy is right for you, and enlighten you about your various options. In addition, I can help file your bankruptcy petition, represent you in court, and meet with creditors on your behalf to negotiate a feasible repayment plan. Ultimately, I can take necessary legal action against any creditor who harasses you or disobeys the automatic stay order.

Contact me at Geranios Law, PLLC to schedule an initial consultation. My firm proudly serves clients throughout all of Montana, including Missoula, Beaverhead, Bosman, Madison, Jefferson, Sanders, Ravalli, and Silver Bow Counties.

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