Debtor Creditor Relations

     The transformation of our economy from a cash-payment system to its present credit dependency has created new challenges for our society. Credit-managing is increasingly necessary. Recent federal legislation has broken new ground in protecting consumers from unscrupulous lending practices. The Truth-in-Lending Act established new regulations under which citizens may be better informed of credit terms before they borrow money from banks, finance companies, and similar institutions. The Fair Credit Reporting Act protects the privacy of consumers. The Equal Credit Opportunity Act was adopted to ensure all citizens equal access to credit. To protect consumers from unwanted harassment, badgering and embarrassment by bill collectors, Congress enacted the Fair Debt Collection Practices Act. Garnishment, a long-established remedy for creditors, became more circumscribed by Title III of the Consumer Credit Protection Act.

      In tandem with Congress consumer protection efforts, the federal bankruptcy laws were revised in 1978. Under the new Bankruptcy Code, debtors whether they seek reorganization or liquidation, are treated more equitably and generously than under any previous bankruptcy laws. Furthermore, a new provision Chapter 13, expands the choices of individuals and small business owners in the management of debt, and a recent amendment, Chapter 12, offers the same relief to owners of family farms. Despite these laws, however, individual consumers retain the fundamental responsibility to manage their own indebtedness wisely.