Posts tagged "Foreclosure"

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Foreclosure Advice & Credit Card Debt: Can Credit Card Lenders Put a Lien On Your Home?

Article by Yuwanda Black

Many homeowners who are facing foreclosure are also battling many other creditors, ie, credit card companies. The two usually go hand in hand. And, as anyone who’s ever had to deal with debt collection calls are aware, some can be quite aggressive in trying to collect — even going so far as to outright lie to consumers.

With the foreclosure crisis raging on with no end in sight, one question that crops up a lot is, “Can credit card companies put a lien on my home?”

Following is a concrete answer to this question. If you’re in the midst of trying to prevent foreclosure, pay down debt and just keep your head above water, following is some advice that will help you to worry less as you struggle to get back on your feet.

Question: Can Credit Card Companies Attach a Lien to My Home

Answer: The short answer is, yes.BUT, it is highly unlikely that it will ever happen, for the following reasons:

Collecting Can Be a Pain

State law dictates the procedures creditors must follow when trying to collect on a debt. And, thank goodness for struggling homeowners — it can be a tedious, slow, expensive process. This means that most creditors want no part of it.

You see, first the card company must sue you to get a judgment against you. This can take months.

Then, once they get the judgment they must collect on it. This can be another time-consuming process. Not to mention expensive for them.

Another reason most creditors won’t bother to put a lien on your home is that it is a risky proposition. Even if they got one, it’s highly unlikely that they will get paid because they are an unsecured creditor. This means that they fall down the food chain behind secured creditors if your home is sold to settle debts.

For example, let’s say you lose your home to foreclosure and it’s sold to pay your debts. Guess who gets paid first — your secured creditors, ie, your mortgage company. And, as many homeowner have two mortgages, this means the credit card company would fall third in line to get paid (assuming there are no other secured creditors ahead of them).

When a home goes into foreclosure and is sold again, it usually sells for much less. So likely all the proceeds will go to the first lien holder (again, your mortgage company). Nothing is usually left over to settle other debts; most of the time the first secured creditor doesn’t recoup all that is owed to them.

For all of these reasons and quite a few more, you don’t have to worry about card companies putting a lien on your home.

When a Creditor Lender May Seriously Consider Putting a Lien On Your Home

Following are some cases where credit card lenders may be more likely to attach a lien to your home:

If you have a lot of equity;

If you owe nothing on it, ie, you own it outright; or

If you own investment property.

Even in these cases though, it is highly unlikely that credit card companies will go through with it. It’s just not cost effective for them.

So, if you’re facing foreclosure and are worried about this type of debt, don’t; backburner the issue for now.

After your get on your feet again, you can deal with your consumer debt — which you shouldn’t just walk away from, by the way. Not only is it a moral responsibility, your credit card debt is a legal responsibility as well. But, the roof over your head takes precedence. So focus on getting back on your feet first and preventing foreclosure.

About the Author

To learn more about foreclosures, home liens and consumer debt, log on to http://ForeclosureBusinessNews.com. You’ll also find info on how to start a foreclosure cleaning business, free articles for your website, newsletter or blog — and a lot more.

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