Creditor’s rights: What are they and how can they be enforced?

On Behalf of | May 12, 2023 | Firm News

There are many reasons why a person or entity may extend a loan to another. If you have served as a creditor and are unsure what your rights are, read on to better understand your legal position.

What are a creditor’s rights?

Broadly speaking, a creditor has the right to get back money that is owed to them by means of a series of legal actions. This may include the right to contact the debtor or their family, put a lien on the debtor’s property, garnish a debtor’s wages or take another action allowed by their state. Creditor’s rights also refer to ways a creditor can interact with other creditors of a debtor, such as their position for repayment.

How can a creditor enforce their rights?

A creditor’s ability to enforce their rights is dependent on the contract they created with the debtor, whether or not the debt is secured and whether or not the debtor is under bankruptcy. If the debtor is not currently under bankruptcy, the creditor should be able to regain their money through any of the means stipulated in the contract, including taking possession of property or garnishing wages. 

If the debt is secured and the debtor comes under bankruptcy, the creditor should be entitled to regain the security item without any additional compensation.

If the debt is unsecured and the debtor has filed for bankruptcy, a creditor may need to accept that his rights are ranked below other creditors who are owed a secured debt. 

When might a creditor need legal representation to protect their rights?

If a creditor finds that their legal right to regain their money is in question or if the financial situation of the debtor has created a complicated legal process regarding who has first rights to the debtor’s assets, it may be time to contact an experienced legal representative who is well-versed in the nuances of creditor’s rights.


A creditor maintains the right to expect to be repaid debts owed to them. Although the exact mean of being repaid depends on the circumstances, a creditor can legally enforce the rights laid out in a written contract with the debtor or take actions that restore the value of their investment even if they are against the wishes of the debtor.