How much is added to the principal amount in judgement

Judgment can take place in any form and it depends upon the filing of the creditor in the court. In some cases, they try to garnish the wages or repossess your property.

Wage garnishments are more common if it's regarding an unsecured debt. Repossession of property is done when you pledge your property while signing the contract and ultimately end up in default.

For any type of judgment to take legal shape, the creditor must file a motion at the court. You have to be served legal notice 20 days before showing your appearance in the court.

There are some cases where people take payday loans and authorize the lending party for a wage assignment in case of defaults. In such cases, court hearings are not necessary. Since you have given them the authorization to deduct the money from your pay stub, they have the legal rights to take this action. But, before they do so, the contract must clearly specify the term and you have to acknowledge it with your signature.

After a judgment has been served, the creditor or the collection agency can ask for a garnishment of your wages up to 25% of your disposable income.