Creditor and debtor law includes the rights and obligations of (1) creditors who extend credit and make loans to consumers and businesses and (2) consumers and businesses who seek credit and loans for their personal and business finances. Creditor/debtor law consists primarily of state and federal statutes.
In Rhode Island, creditor and debtor law is governed by a combination of state statutes and federal laws that outline the rights and obligations of both parties in credit and loan transactions. State laws in Rhode Island regulate various aspects such as the creation and enforcement of security interests in personal property, debt collection practices, and the rights of creditors to collect debts through legal means such as liens, garnishments, and foreclosures. The Rhode Island Fair Debt Collection Practices Act mirrors the federal Fair Debt Collection Practices Act (FDCPA) to protect consumers from abusive debt collection practices. Additionally, federal laws like the FDCPA, the Truth in Lending Act (TILA), and the Bankruptcy Code play a significant role in dictating how credit transactions and debtor protections are handled. These laws ensure that consumers and businesses seeking credit are provided with certain disclosures about the credit terms and are protected from unfair lending and collection practices, while also providing mechanisms for creditors to recover debts owed to them.