A 'Garnishee Order' Is

question 16

Multiple Choice

A 'garnishee order' is:

• A)an order of the court declaring the debtor bankrupt.
• B)an order of the court authorising a court officer to seize the goods of the debtor and sell them.
• C)an order of the court directing the debtor to pay the debt in specified amounts on specified dates.
• D)an order of the court directing a person who owes money to the debtor to pay the money into the court.

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Definitions:

Pledging Accounts Receivable

Using accounts receivable as collateral to secure a loan.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Recourse

In secured lending, if the asset collateralizing a loan proves not to have the value anticipated, recourse implies the borrower is still responsible for the debt. The lender is said to have recourse to the borrower.

Seasonal Working Capital

Additional working capital needed to support fluctuations in business activity due to seasonal changes in demand.