If you find yourself in unpaid credit card debt, you may be worried about how far credit card companies will go to ensure that you pay off every last bit of your debt — even if it means seizing your home.
However, you can rest assured knowing that credit card companies do not have the right to take away your home over unpaid debts. Although in some cases, there are loopholes where you may have no choice but to sell your home to pay off your debts.
Can credit card companies take your home as a way to secure unpaid debt?
The short answer is no, credit card companies cannot legally go in and seize your home if you have unpaid debts.
Credit card debt is unsecured, meaning that it is not tied to any specific assets, such as a vehicle or mortgage.
However, if companies cannot collect the debt through letters or debt collection agencies, they can file a lawsuit against you in civil court. If they win, they can obtain a judgment lien against you.
A judgment lien is a legal claim that allows creditors to collect the debt from the sale of your property. In more extreme cases, they can even force you to sell your home in order to collect debt.
However, some state laws, such as homestead exemptions, protect your home from creditors. The amount of protection varies by state, however, in some cases, they protect the entire value of your home, making it difficult for creditors to force a sale.
If you’re concerned about credit card debt and want to understand more about your rights, contact our trusted experts at Todd Cushner & Associates today.