How do unsecured creditors compel payment?
Prohibited forms of collection Self help – seizure of the debtor’s property Exception to self-help prohibition Does not include “setting off” – the process by which the creditor merely forgets about or personally forgives the debt Conversion Generally, the seizure of a debtor’s property by an unsecured creditor will constitute conversion Conversion is the wrongful exercise of dominion and control over another’s property in denial of or inconsistent with his rights. A ∏ need not establish that the ∆ acted with a wrongful intent. The intent required is not necessarily a matter of conscious wrongdoing. It is rather an intent to exercise a dominion or control over goods which is in fact inconsistent with the ∏s rights. Larceny The seizure of a debtor’s property, by an unsecured creditor, to satisfy a debt may also constitute larceny or robbery Unreasonable If an unsecured creditor’s demands for payment are unreasonable the creditor may incur liability for wrongful collection practices Levy
