Court proceedings are initiated when a debtor has fallen behind on his or her payments to such a point that the lender believes that there is a real risk that the individual will default on the loan thereby leaving the lender with a huge financial loss; these court proceedings, usually presided over by a judge or other court appointed officer, issue legal rulings or decisions, otherwise known as court judgments, concerning the method and amount that it to be repaid to the lender. Several factors are used to determine a court judgment and each ruling is unique to the particular situation in question. Determining factors for legal decisions include the amount initially borrowed from the lender, the amount currently still owned on the debt, the available and documented assets, both financial and physical, of the debtor, and the ability or willingness of the debtor to appear before the court.



The most important factor a judge uses to determine the legal and financial ramifications of a defaulted loan is the ability and willingness of the debtor to appear before the court. Many individuals at too embarrassed to appear for the proceedings at all which leaves the judge little option than to decide in the favor of the present lender who first initiated the proceedings. Other individuals simply feel that they do not have means or wherewithal to fight the lender or the legal or financial system. Still others feel that their financial problems will go away if the ignore them or that they can simply start over from scratch.

However, the simple fact is that most judges or other court appointed officers are more sympathetic to an individual who has fallen behind on their loan payments if they show some concern for the situation and make every effort to make the situation right. This means that the debtor can best help his or her situation by representing his or herself in court. Simply by showing up can make a huge difference in the final legal ruling. Only by showing up to the court can a debtor try and explain why he or she has fallen behind in their payments to begin with by emphasizing the personal setbacks that have led to the current financial situation.

Once a judge has taken in into account the personal situation of the debtor, he or she must them take into account the financial realities of the situation. These realities are the amount of the initial loan, the amount already paid back, and the amount still owed. The lower the amount that was initially borrowed then the less hostile the judge will be. It is also a good thing, if the debtor has already repaid some of the loan. This shows that the individual had every intention of repaying the loan. Finally, when deciding court judgments, the judge will consider how much is still owed to lender. The larger the amount owed the more severe the penalties involved with defaulting.

Another concern for the court is how the debtor will be able to repay the loan. It is the responsibility of the prosecuting lender to bring to the court's knowledge any and all assets that the debtor make have access to. This means that all bank accounts and all owned property must be made public to the court. The court will then use this knowledge to determine how the debtor will repay the defaulted loan.

Court judgments vary in scope and veracity depending on the particular financial situation of the debtor.