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. When someone loses a court case involving debt and is ordered to pay the damages set by the court, the party is referred to as judgment debtor.
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. In the event of failure of the judgment debtor to pay on time, the judgment creditor is within his or her right to take the damages awarded to him or her by force.
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 debtor’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.