Understanding Creditor Defamation

Everyone would love to pay off their debts in a reasonable amount of time, but sometimes, life happens. Due to family emergencies or sudden life changes, we may find ourselves suddenly able to keep our promises. The inability to pay our debts can bring a lot of stress into our lives, such as constant calls from creditors or constant worry about how you will get out of this difficult situation.

A less discussed issue that can arise from debt is creditor defamation. If you’ve never heard the term before, keep reading! You’ll learn more about what creditor defamation is and how you can protect yourself.

What is Creditor Defamation?

Luckily, you don’t have to think too hard for this one. Creditor defamation is exactly how it sounds. If a creditor is making false and inflammatory statements in public or to others who aren’t involved in your financial proceedings, this is defamation, as long as it results in a hit to your reputation. Any time a creditor speaks to a third party about your financial situation and spreads false information to this third party, it is defamation.

Well, who is considered a third party? A third party is considered anyone outside the following: the indebted person’s attorney, the spouse of the indebted person, and of course, the indebted person themselves.

It is important to understand the distinction between the different forms of defamation. Libel is written defamatory statements, while slander is spoken statements that are defamatory.

Examples of Creditor Defamation

The above definitions are easier to understand with an example. Let’s say that you work at an office downtown, and a coworker comes up to tell you that a debtor contacted them and told them about your debt. This could be considered an example of creditor defamation, especially if a creditor describes you as a “deadbeat” or with any other derogatory term. A coworker is not one of the three above parties (the indebted person themselves, the spouse of the indebted person, or the indebted person’s attorney) so they are not entitled to hear information about your debt.

What to Do

Defamation laws vary from state to state, so it is important to figure out what you need to prove that defamation has occurred in your particular state. However, most defamation claims follow the same general principles. Here are the elements from the state of Alabama, for example;

  • The defamatory statement spreads false information about the consumer
  • The statement was made to an unprivileged third party
  • The defamatory statement has had a negative influence on the indebted person’s reputation
  • The claimant must prove the extent to which their reputation was harmed to get a fair reward for their experience

The best thing to do is reach out to an attorney like Greenway Bankruptcy who can help prove your case. Your attorney should be from your state, so they are familiar with the laws and practices in your area. An attorney will be able to put an end to the defamation you are experiencing fast — don’t hesitate to reach out.

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