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The Legalities of Debt

• If the judgment is in favor of the creditor, the court fixes an amount that the debtor needs to pay the creditor, failing which the debtor is liable to wage garnishment.
  • If the judgment is in favor of the creditor, the court fixes an amount that the debtor needs to pay the creditor, failing which the debtor is liable to wage garnishment.
  • If a court rules in the favor of a debtor, the debt payment is nullified.

A debt legal judgment is the decision of a civil court judge, either in the favor of a creditor or a debtor. The court’s verdict is final. Either the debtor has to pay the amount decided by the court or the creditor has to stop all collection activities.[br]

Debt Legal Proceedings

In most cases, the contested debt is an unsecured one and the legal judgment can occur several years after the original debt was incurred. A debt legal judgment is the final stage of the debt collection process. During the collection process, the collector may decide to negotiate the terms of payment with the debtor. It is the creditor who generally determines the viability of taking the matter to the court. The debt collector may or may not be the original creditor.

Debt Legal: Collection

Even if a debt judgment goes in the favor of the creditor, the debtor may be unable to pay up immediately. Debtors have approximately three weeks from the date of the verdict to pay the amount voluntarily. It is only after that duration that the creditors can take the following steps to get their payments:

Wage Garnishment – If creditors are aware of the debtor’s workplace, they can consider garnishing their wages. For this, they have to acquire a periodic garnishment form from the court clerk and file it (for which a small fee is charged). Garnishment can be served through a certified mail directing the debtor’s employer to pay the debtor’s salary to the creditor.[br]

Bank Garnishment – If creditors know about the debtor’s bank or brokerage account, they can file a non-periodic garnishment. This kind of garnishment is effective from the date it is served to the bank or brokerage account.

Creditors Exam Subpoena – If a creditor files for this exam, the debtor would have to appear in court to answer enquiries about his income and expenses. The debtor may have to submit his tax returns of the previous three years, his brokerage statements and the titles to vehicles he owns.