Debtor vs. Creditor- Who They Are & What The Difference Is
What is the difference between creditors and debtors?
If you’ve ever had to take out a loan or a similar form of credit, you’ve likely heard the words “creditor” and “debtor” used to explain the account. But sometimes these terms and their meanings can be confusing. Being informed of what creditors and debtors are and how you can sue a creditor or debt collector for violating your rights is important.
What is a Creditor?
Creditors are defined as an entity or person that extends credit, lends money or provides a service to another party. Creditor examples include banks, mortgage officers, car dealers, credit card companies or utility companies.
What is a Debtor?
The exact opposite of a creditor, a debtor is someone or some entity who owes money to another party. If you have a home mortgage, credit card debt, auto loans or student loans, you are a debtor to the entity that provided that good or service, the creditor.
Simply put, a creditor gives a debtor a loan, and the debtor owes the creditor that money. A debtor/creditor relationship is similar to a customer/supplier relationship. For example, when someone takes out a student loan, the student is the debtor and the institution that supplies the loan is the creditor.
How to Remove Creditors from Your Credit Report
When reading your credit report, you’ll find a list of the creditors you owe and what kind of account it is. Take note of each entity listed to verify the information is accurate. You may find that there is an error on your credit report, such as outdated information, mistaken or merged accounts, or even a clerical error. An error on your credit report can result in higher interest rates, affect your U.S. government clearance, or the loss of a job opportunity, getting an apartment or loan approval.
Whatever the mistake is, you have the right to dispute this error under the Fair Credit Reporting Act. If the error is not fixed within 30 days of the credit reporting agency receiving your dispute, you can sue a creditor for false reporting. Get free legal help from the Consumer Law Firm of Francis Mailman Soumilas, P.C. today to talk about your options.
How to Report Harassing Calls from Creditors
You may see the original creditor and a collection agency on your credit report about accounts you have and debts you may owe. When you see this, that means that the creditor may have sold your debt to a collection agency that will then do the job of collecting your payments to make up the amount owed.
Debt collectors and creditors alike have specific laws to follow when contacting a debtor for payment. They cannot harass or threaten you. If your debt collection rights have been violated, you may be entitled to damages. Contact the consumer protection attorneys at Francis Mailman Soumilas, P.C. today to learn how to report harassing calls from creditors.