What Happens If a Creditor Puts a Lien on My Home?

As a bankruptcy attorney I see the toll debt can take on a family every day. It's something that my clients are constantly dealing with. Now that foreclosure rates are at an all time high, saving your family home has probably moved up to number one on your to-do list. What many people don't realzie however is that foreclosure from mortgage isn't the only threat you can face. You could be in just as much danger of losing your home if someone puts a lien on it.

This is, undoubtedly, one of the scariest tactics that a creditor can use—after all, having something like your home in danger, which you've worked your whole life to have and keep, is a terrible feeling. At this point, now only will you need help with the original debt, but you might end up facing the need for protection from foreclosure.

If a creditor gets a judgment for a debt, for example, an old credit card bill, they can put a lien on your house. If you call the collection agency about it, they may not immediately realize they have a lien. As with a mortgage, the lien-holder can then forclose on your home should they so choose.

Even if the creditor decides they don't want to foreclose at that time, the fact that a lien is in place makes it impossible for you to sell your home (the title company will do a search of public record for any judgments or attachments against the property before closing).

So what do you should residents do when find out you have a lien on your home? There are two primary ways to get rid of it. One must "satisfy the judgment," (which means you have to pay the creditor back in full, plus interest). Of course, you probably would have already done that if you could have.

The other way can be a little more complicated. There is a part of bankruptcy law which will can allow you to remove a lien from your property. This is an exceptionally complicated process sometimes known as "lien-stripping,", and should only be trusted to the most skilled and experienced of bankruptcy attorneys.

Why? Well, you literally have your home at stake. If there happens to be a mistake made in the lien-stripping process, you could not only lose your home, but your bankruptcy case may be dismissed as well, leaving you worse off than when you started.

Don't take that chance. Find out what your options are to keep your home. Make sure you have the absolute best bankruptcy attorney to handle your case.

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