Debt collection is a carefully regulated industry. There are strict limitations on what a company can do to try to secure payment of a debt. Violations of these rules can lead to court hearings and major financial penalties.
Those trying to collect on a debt can take certain actions to push someone to pay them back so long as they comply with federal laws. Phone calls and letters are common tactics, as are repossessions and foreclosures.
Sometimes, especially if there isn’t any collateral property for the lender to reclaim, the collection process will involve the civil courts. In Wisconsin, someone bringing a debt-related lawsuit can possibly secure a judgment against the other party who has refused to make appropriate payments. How do the Wisconsin courts protect creditors who have to take a borrower or debtor to court?
Wisconsin judgment results in an automatic lien
Bringing a debt-related lawsuit requires that a creditor prove the debt is valid and that the debtor has failed to repay it or comply with terms in a contract between the parties. If the courts agree with the creditor and rule in their favor, they will issue a judgment related to the unpaid debt.
That judgment requires the person in debt to repay what they owe. Of course, someone who is already gone to great lengths to avoid financial responsibility won’t necessarily start making payments just because the courts tell them to do so.
Wisconsin law automatically places a lien against a person’s real property that is subject to a judgment, with certain homestead exemptions. That lien may persist for 10 years in most cases and will ensure that the creditor receives repayment if the debtor refinances, transfers or sells the property. Understanding the debt collection laws in Wisconsin could help you navigate legal proceedings related to an unpaid debt.