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.

If the debtor has personal assets or an independent financial account, then a debt may be collected, not through wage garnishment, but through the direct seizure of these personal assets or financial accounts. However, in order for the lender to seize these assets, he or she must first identify those assets. Many times a debtor will try and hide financial accounts or personal property by transferring ownership of property to another trusted owner or by transferring funds to another banking account. Once a judgment has been issued, then it is the responsibility of the lender to identify these assets or accounts. If there are no assets to seize, then the debtor must find another means of collecting the defaulted funds.

The ultimate means of securing the repayment of a past due loan or mortgage is to initiate a lien process against the debt holder. The difference between a lien and a direct seizure is huge. Through a seizure, an asset is directly taken over by the financial or lending institution and then auctioned, sold, or assumed by that institution in order to recoup some of the financial loss. However, this process can only occur if the debtor owes the asset out right. If the debtor does not own the property or asset out right, then a legal lien can placed against the property. A lien is a piece of legal legislation that keeps the property owner from selling or using an asset until a loan or mortgage has been repaid. It is, in essence, a means of holding a piece of property hostage until a debt is repaid. While the asset may be held, it cannot be directly taken over or sold by the lending institution.

Judgment recovery is the responsibility of the lender. The above means are the typical methods that a lender uses to recoup a defaulted loan or mortgage.