Can Credit Card Companies Put a Lien on Your House
Tin They Place a Lien On My House for Credit Card Debt?
Tin can a debt collector or creditor put a lien on your house for credit card debt? Mitch from Florida asked us: "Can credit card companies put a lien on my and my married woman'south house for my charge offs?"
Yes information technology'due south possible for a lien to be placed on your home for certain debts, just a debt collector's threats to do and then may be illegal. Here is what you need to know to protect your belongings.
When tin a credit card company place a lien on your property?
A credit menu is an unsecured debt. The financial term "unsecured" means that there is no collateral, and there is typically null you ain that a credit card company can repossess or take until y'all are sued and the creditor or collector gets a judgment confronting y'all. Before that happens, you should be notified of the lawsuit and accept the opportunity to answer.
(Read: What to do if you are sued by a debt collector)
If you stop paying a debt, the creditor or drove agency may sue you. If it successfully sues you for a delinquent debt and obtains a judgment, it will try to collect that money from you. How they can collect a judgment depends on land law. In some states creditors with judgments can:
- Garnish your wages,
- Attach (or seize) money in bank accounts,
- Place a lien on your firm (if allowed under land police)
In some states, a judgment creditor may be able to place a lien on other personal property such every bit a automobile or truck.
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Who can put a lien on your property?
In most cases a creditor or debt collection agency must sue you for the unpaid debt and get a courtroom judgment before information technology tin can place a lien against your house. In that location are several other situations where a lien may be filed:
- A mechanic's lien may be placed by a contractor who performs work on your home and is not paid. The contractor will generally accept to follow specific procedures and file it within a certain time. It may accept to sue to enforce the lien, but it oft can place the lien without suing you kickoff.
- A property tax lien may be placed against your dwelling house if you don't pay your belongings taxes. No lawsuit is mostly filed first.
- A taxation lien may outcome in a lien against your home. If you owe land or federal taxes, the taxing authority may exist able to place a lien confronting your dwelling without taking you to court kickoff.
- A child support lien may be placed if you owe past due child support.
Most states protect certain amounts of domicile equity from creditors. For case, in some states, like Arkansa, Florida or Texas, an unlimited amount of equity in your primary (homestead) residence may be protected from creditors.
In other states, the homestead exemption will vary. For example, in Maine, up to $47,500 in home disinterestedness may be protected from creditors, and it rises to $95,000 if:
- a minor dependant lives with y'all, or
- you or are at to the lowest degree 60 years old or disabled, or
- you have a dependent who is at least 60 years old or disabled.
Home equity generally refers to the difference between what your home is worth and what y'all owe on information technology. So if your home is worth $100,000 and yous owe $60,000 on your mortgage, your equity is $40,000.
What happens if at that place is a lien on your house?
Usually a lien stays in identify until it is satisfied (paid) or you lot sell the dwelling, at which point it must be paid in social club to release the championship. In some cases, a lienholder may force a sale of your home. This is true of many holding taxation liens or federal tax liens, for example. This is not unremarkably an choice, however, for creditors similar credit card companies or debt collection agencies. They may have to be patient and wait until you lot sell or refinance the home.
How exercise you lot get rid of a lien on your house from a credit card?
First, if a debt collector is threatening to put a lien on your domicile, and it has not sued y'all and obtained a judgment first, nosotros strongly recommend you lot go a costless consultation with a consumer law attorney every bit soon equally possible. The debt collection agency's threats may exist illegal under the Fair Debt Collection Practices Human action and you may be entitled to damages. The attorney may even be willing to take your case at no upfront cost to yous. It certainly doesn't hurt to find out what your options are.
If y'all simply want to enquire an attorney a question, here is an inexpensive online service that tin can assist:
If a lien has already been filed, here are some options:
File to take it released: If a creditor'south lien has been filed already and your home equity is "exempt," or protected from creditors (or debt collectors collecting on their behalf), or if it is erroneous, you may be able to file paperwork with the court to have the lien removed. The procedure for doing this varies by state. (For instance, in Maine, you file a Request to Discharge Execution on Real Property.)
Pay or settle it. If you can afford to pay it off, you may want to do that to put it behind you. You lot may be able to work out a payment plan, or negotiate to settle the debt for less than the full balance by paying a lump sum. It can be harder to do that when there is a judgment against y'all since the creditor knows it has the power of that court judgment to collect the debt. Even so, it may be worth a try. Either manner, if yous pay the debt, brand sure you lot go a written agreement and keep good records. You'll also want to make sure the judgment creditor files a release of the lien when the debt has been paid off.
Expect until it's too onetime. Judgment debts are subject area to statutes of limitations which somewhen expire. But warning: this can exist a long time (ten-twenty years in many states) and the judgment creditor (the original creditor or debt collector who got the judgment) may be able to renew it. By paying on the judgment y'all will likely extend this time catamenia. If you take a lien on your domicile for a very old debt you may desire to contact an attorney to find out if it's outside the statute of limitations.
If a lien has been filed because there is a judgment confronting you and you can't pay information technology, nosotros encourage yous to talk with a bankruptcy attorney who tin can explain what the judgement creditor can and cannot do to collect the judgment. Bankruptcy attorneys are quite familiar with a variety of fiscal bug similar this, and will aid you understand your options.
Dispute information technology. If you believe the lien was filed erroneously, you will want to dispute it. (You may as well exist able to dispute the debt that led to collections.) Your best bet is to consult a consumer police attorney. If yous do and discover yous cannot beget an attorney, you may want to await into other options such as legal aid or representing yourself in court.
How does a lien bear upon your credit scores?
In the past, judgments and tax liens appeared on consumer credit reports and had a very negative impact on credit scores. Even so, a few years ago the major credit bureaus agreed to not to report these because sure information could not be verified. It is unlikely that a lien will appear on your credit reports and affect your credit scores.
However, it'south a good thought to cheque your credit reports and scores to make sure. You lot tin go your free credit reports at AnnualCreditReport.com and there are dozens of places where you can monitor your credit scores for costless.
Of course the collection accounts or the debts from the original creditor that led to the lien may announced on your credit reports. Learn what to do about collection accounts on credit reports.
Where can I complain if I have a trouble with a lien on my firm due to credit card debt?
An attorney can also assist you with problems such as wage garnishment, figuring out how to handle debts in collections and other financial bug.
In improver, if you take a complaint almost unfair collection practices by a creditor or collection agency, yous may desire to file a complaint with the Consumer Financial Protection Bureau (CFPB), the Federal Merchandise Commission, or your country attorney general's office. The agencies collect complaints virtually financial products and services and may accept action if they identify a pattern of complaints.
Learn how debt collection laws can help you bargain with debt collectors.
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