When can a creditor put a lien on my house?

Question

If I owe money and I own a home, can the creditor place a lien against my house?

Answer

If you fail to pay back money that is owed to a creditor, take no action to fix this financial problem, and wind up with a lien on your house, it may be completely legal for it to be there. In some instances, creditors who are traditionally unsecured creditors, such as medical debts, personal lenders or even credit card lenders, will pursue homeowners for the equity present in the home owned. To do so, the lender simply needs to request the lien from a judge.

When a Lien Occurs

A lender has the right to require you to pay a debt in full at any time. If you fail to meet the terms of the agreement of the debt, the lender may take additional steps to try and collect those borrowed funds. This includes pursuing lien action.

  • Lenders will often request a lien when and if the borrower has failed to communicate with the lender about the reason for nonpayment or has not upheld the contract agreement.
  • The lender is legally able to take this action after steps have been taken to communicate with the borrower and no action has been taken.
  • The lender can only legally do this through the agreement of a judge, who will likely make the decision when the borrower does not show up for a summons at court.

When you are facing the potential for a lien on your home, work with a debt settlement attorney to stop the process. This can occur if you take steps to improve the situation sooner. If a lender put a lien on your property, you can take steps to remove it.

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