Alice has fallen behind on her signature loan.She recently received a notice from the lender that her wages were going to be garnished to pay off the debt.What is the loan clause that allows the lender to take this action against Alice because she was in default?

Question

Quizplus · Accepted Answer

The recourse clause in a loan agreement allows the lender to take legal action to recover the debt from the borrower if they default on the loan. This can include wage garnishment, where a portion of the borrower's earnings are directed to the lender until the debt is paid off.

Alice Has Fallen Behind on Her Signature Loan