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What Is a Judgment Debt?

There are instances when issues involving the validity of debt are brought before a court of law. Usually, this happens when a creditor seeks payment from a borrower. Thus, it becomes the duty of a judge to provide a decision as to whether the debt is indeed valid or not. This decision of validity is referred to as judgment debt.

A court of law can be provided with the power of deciding whether or not a debt is valid if the creditor presents the case in court. The judge decides on the matter by evaluating the merits of the case, the statements of fact, and all other relevant information. By providing a judgment debt, the judge rules that the debt is valid. This is a favorable ruling for creditors or lenders that seek to gain payment. The result of a judgment debt is a court order issued to the borrower to pay the loan according to the terms and conditions stipulated by the court.

When a judgment debt is issued, the court provides the means upon which a creditor can seek his or her repayment. Thus, the judge is the one that provides for the process of repayment. This may entail a creditor the right to a certain percentage of the borrower’s wages, which are forwarded to the court or to the creditor by the employer. The percentage that can be withheld varies upon the jurisdiction, but the most common maximum or ceiling price is 25% of the net wages.

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