If you’re dealing with debt, the stress can keep you up at night. How will you make your payments? What happens if you can’t pay? Can creditors take your home? You can’t sleep because your mind is racing with all the terrifying possibilities that can happen if you get behind on your credit card payments. If this is you, we’re here to help. Keep reading for more information, or reach out to one of our certified debt consultants today for a free consultation to see how we could help resolve your debt.
Can I Lose My House to Credit Card Companies?
While it is possible to lose your house due to credit card debt, it ultimately depends on a few things like how much credit card debt you have, how behind on payments you are, and what state you live in. Depending on your debt amount, you might be able to negotiate an agreement with your creditor that could make it easier to resolve your debt. Some states also include provisions that prevent credit card companies from seizing your primary residence in the case of late payments.
Secured Debts vs. Unsecured Debts
When figuring out what your credit card company can do to recoup their loans, you first must take a look at the differences between secured and unsecured debts. The type of debt that you have with a company plays a vital role in how easy or difficult it is for them to seize your assets.
Secured debt is a loan you have established that is backed up by some type of asset. If you are unable to make payments on your loan, then the lender is able to seize the asset you used as collateral with your debt without having to go through the work of taking you to court. With secured debts, you are at risk of losing whatever asset you put up as collateral, but these debts are most commonly mortgage or car loans and not credit card debt.
Unsecured debt does not have collateral to back up the loan that you have taken out. Credit card debts will fall into this category as you don’t have to put any assets on the line if you aren’t able to make a payment. If you fail to pay off an unsecured loan, then the lender will first resort to having a collection agency reach out to you in order to settle the account. If a collection agency is unsuccessful in collecting from you, then they will likely take you to court to get a judgment that could allow them to seize your assets.
How Does a Creditor Collect on a Judgment?
If a creditor takes you to court due to unpaid credit card debt and receives a judgment in their favor, they typically will collect using one of following ways.
A wage attachment is when a creditor can take a certain percentage of your paycheck and have it applied directly to the debt until it is completely paid off. This can make life hard if you are already living paycheck to paycheck, as you will no longer receive your full income but instead will automatically have a percentage of it sent to your creditors.
A lien on your property can be used by creditors to lay claim on your home or other real estate. While this can be a last resort, it can help ensure that the creditor will eventually get their money back as you can’t sell property with a lien attached without first paying off the debt.
A property levy allows an officer to take possession of your items and then have them auctioned off at a public auction with the proceeds going toward settling your debt. This can be a particularly unpleasant experience for those who have grown attached to their belongings, but again it can help make sure that the creditor is paid back.
Order from a Judge
Typically the last resort when trying to collect is getting an order from a judge that will require you to pay off your debts. In some states, if this order is violated, the judge might hold you in contempt and force you to pay a fine, perform community service, or in the most severe cases, serve jail time. While these warrants are rarely executed by officers, the threat of jail time can be enough to make many people do whatever they can to settle their debts.
How Can CreditAssociates Help?
If your credit card debt is causing you stress, we can help. Our team of certified debt consultants can negotiate with your creditors on your behalf to help you resolve your debts. In fact, credit card debt is one of our specialties. We’ve helped thousands of clients just like you settle their debts for less than they owe. We could help you resolve your debt in as little as 24-36 months all while paying less than the initial amount you were in debt for. Learn more today with a free, no-commitment consultation.
Common Questions About Credit Card Debt:
Do credit card liens expire?
A lien will typically expire based on the details within the judgment against you. Once the judgment expires then the lien against any of your assets will also expire.
Can a credit card company put a lien on my car?
In theory, yes a credit card company can have a lien put on your car, but this would typically be a last resort as it can be difficult to enforce.
How long can a credit card company come after you?
The statute of limitations when it comes to credit card debt varies by state. Some states limit the ability of collection agencies to reach out to you after their statute of limitations expires, while others may not allow you to be sued, but the collectors can still reach out to you in order to get paid.
Can credit card companies sue you?
A credit card company can take you to court if they can prove that the debt is owed. If a credit card company can prove that it can sue, then your creditor can move forward with taking you to court and suing for payment on the account.
What Is Foreclosure?
Foreclosure is when the bank can take your house from you. They can’t seize any other assets that are not related to the home, such as a car or collectibles, but they can actually take away what is supposed to be one of your most valuable possessions: a place where you live.