Answer:
When a borrower defaults on a debt, the lender may have several options for collecting on the debt. One way a lender can collect on a debt when the borrower defaults is by suing the borrower in court. If the lender is successful in court, they may be able to obtain a judgment against the borrower, which allows them to garnish the borrower's wages or seize their assets in order to pay off the debt.
Another way a lender can collect on a debt when the borrower defaults is by using a debt collection agency. Debt collection agencies are companies that specialize in recovering unpaid debts on behalf of lenders or creditors. Debt collection agencies may use a variety of tactics to try to collect on a debt, including contacting the borrower by phone, mail, or email, or even suing the borrower in court.
Finally, a lender may also be able to collect on a debt when the borrower defaults by repossessing any collateral that was pledged as security for the debt. For example, if the borrower defaulted on a car loan, the lender may be able to repossess the car and sell it in order to recover the unpaid balance on the loan.
Step-by-step explanation: