A Lender’S Responsibility To Force Judgment Recovery

January 22, 2010 · Posted in IRS Problems · Comments Off 

When a debtor cannot repay the extended loan or gets behind on financing payments, the lending institution, bank, or individual who initially extended the loan can force repayment of pay due moneys by taking the debtor to court; however, once the judge decides to make the individual repay the loan, it becomes the lender’s responsibility to force the judgment recovery. This can be done through a number of different ways including wage garnishment, property seizures, financial seizures, and financial liens. While a judge or a court officer can initiate these proceedings it is up to the lender to declare the means from which the collection is to take place.

The most common form of judgment recovery is wage garnishment. Wage garnishment is when a percentage of an individual’s wages is taken from a paycheck before the check is given to the wage earner. The particular percentage assessed depends on the amount owed to the lending institution and the amount an individual earns through a given paycheck. This means is popular because a steady stream of money can be guaranteed to be repaid since the wage earner has no ability to access the funds before it is transferred to the lender. Therefore, the debtor can slowly repay the defaulted loan. However, this is a slow method. It is only used when the debtor does not have the means or the assets the repay the defaulted loan more quickly.

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