Define: Consumer Credit

Answer: No, there are laws in place that regulate the maximum interest rates that creditors can charge on consumer credit loans. These laws vary by jurisdiction and may depend on factors such as the type of loan and the borrower’s creditworthiness.

Answer: The FCRA is a federal law that regulates the collection, dissemination, and use of consumer credit information. It ensures that credit reporting agencies maintain accurate and fair credit reports, and gives consumers the right to dispute inaccurate information and receive a free copy of their credit report annually.

Answer: Yes, creditors have the right to take legal action to recover unpaid debts. They may file a lawsuit against you, obtain a judgment, and potentially garnish your wages or seize your assets to satisfy the debt.

Answer: The statute of limitations refers to the time period during which a creditor can legally sue you for an unpaid debt. This period varies by jurisdiction and the type of debt, typically ranging from three to ten years. After the statute of limitations expires, creditors can no longer sue you to collect the debt, although they may still attempt to collect it through other means.

Answer: No, creditors must adhere to the Fair Debt Collection Practices Act (FDCPA), which prohibits them from engaging in abusive, deceptive, or harassing practices. They are generally restricted from contacting you at inconvenient times or places, such as early morning or late at night, and they must respect your request to cease communication.

Answer: Yes, a creditor can continue to report negative information to credit bureaus even if you dispute the debt. However, they must also report that the debt is disputed, and credit bureaus are required to investigate the dispute and correct any inaccuracies if they find them.

Answer: In some cases, yes. If a creditor obtains a judgment against you and you fail to repay the debt, they may be able to seek a court order to seize certain assets, such as bank accounts or real property, to satisfy the debt.

Answer: Yes, creditors can generally charge late fees or penalties for missed or late payments, as long as these fees are disclosed in the credit agreement and comply with applicable laws and regulations.

Answer: No, creditors are prohibited from discriminating against borrowers based on race, color, religion, national origin, sex, marital status, age, or other protected characteristics under the Equal Credit Opportunity Act (ECOA).

Answer: Yes, if you default on a loan secured by collateral, such as a vehicle or property, the creditor may have the right to repossess the collateral. However, they must follow specific legal procedures and cannot engage in “breach of the peace” during the repossession process.