What Is The Difference Between Consumer And Commercial Debt?
Not all debt is taken out for personal use, businesses also incur debt in their daily operations. And, just like in the case of personal (or consumer) debt, when a business does not pay its debts, the lender will seek to collect. Commercial debt collections are similar to consumer actions, but there are some differences. For instance, the law presumes a business owner to be more savvy than the average consumer, and so the laws regarding collection practices typically do not apply to commercial collections.
The most important law regarding consumer collections is the Fair Debt Collection Practices Act. The Act prohibits certain actions by creditors when collection debts incurred for personal, consumer purposes. The following are among these prohibitions:
● Abusive or harassing collection tactics, including threats.
● A notice regarding the consumer’s right to dispute the debt must be provided.
● The consumer must be given the opportunity to request the balance, and the name of the original creditor if it is different than the entity undertaking collection activity.
These protections are not afforded businesses, for commercial collections. This means, if you are a small business owner and are experiencing financial difficulty, you must act quickly to protect yourself from collection efforts. The amount of time for a consumer to dispute a debt is longer than that for a commercial debt, which means if you are sued you have a shorter amount of time to answer. Failure to answer will result in a default judgment being entered against your company, which could result in garnishment of your banking accounts. Call a knowledgeable attorney today to protect your business.
If you have questions about the difference between consumer and commercial debt, call our office for answers. Call a Plantation, Florida debt relief attorney today for more information.