What are the duties of a creditor?

In Washington, a creditor is generally a person, bank, or organization that lends someone else money or extends credit in exchange for repayment of debt with interest. As such, they are legally obligated to adhere to state and federal debtor and creditor laws. The duties of a creditor include: •Verifying the creditworthiness of those to whom they lend money or extend credit. They must ensure that the borrower has the ability to repay the debt. •Providing a clear and understandable agreement to both parties, outlining the terms of repayment. This agreement should also provide information on the interest rates and terms of repayment. •Notifying the debtor of any change in terms. Creditors must provide notice to their debtors of any change in terms, including any increase in interest rates, additional fees, or other changes. •Providing timely, accurate records of the debt and payment history. This should be provided to the debtor on a regular basis. •Collecting the debt with fair and accurate collection practices. Creditors cannot use unfair, deceptive, or abusive practices to collect a debt, such as harassing phone calls or threatening to take legal action. •Adhering to any applicable state or federal laws that govern debt collection. These laws protect debtors from unfair and deceptive practices. Finally, a creditor should always make sure they are in compliance with the Fair Debt Collection Practices Act, which protects debtors from certain abusive, deceptive, and unfair debt collection practices.

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