Banks and other lenders in Tennessee are in the business of loaning money to people, with the expectation they will be paid back what they loaned plus interest. Unfortunately, for a variety of reasons, sometimes, debtors do not make the required payments on their loans. This can hurt a lender's bottom line, so lenders need to be proactive and take steps to try to recover what they are owed.
Lenders have numerous options to try to recover debts that are owed to them. They may start by contacting the debtor via mail or telephone to ask that the debtor pay what is owed. If that fails, they may move the debt to a debt collection agency, which will contact the debtor to try to collect on the debt. Failing that they may try an attachment proceeding or a replevin action, which are a pre-judgment remedies. Finally, if all else fails, the lender may sue the debtor.
If the lender succeeds in its lawsuit, or of the debtor fails to appear in court, a judgment will be made in the lender's favor. This judgment allows the lender to claim the amount of the debtor's assets necessary to pay back the debt. For example, the area sheriff may take the property at issue and then arrange for the property to be sold. Judgment liens or materialmen's and mechanic's liens may also be available in certain circumstances.
Banks and other lenders take a risk when they issue a loan to a consumer. Usually that risk pays off, and the loan is paid back plus interest. But, when that does not happen, it is good to know that there are legal steps lenders can take. Keep in mind that these recovery efforts are highly regulated, so it is important for lenders to ensure they are complying with all applicable regulations when trying to recover debts.