Harris-Courage & Grady, PLLC
Understanding the Power of Liens
If you are behind on your payments, a creditor may tell you they will put a lien on your home.
What Does that Mean?
A lien is a public record attached to your property that states that you owe a creditor money. Liens are usually attached to real estate, but can sometimes be attached to cars or other property as well.
With a lien, a creditor has the right to receive payment when your property is sold. Your property cannot be sold unless the lien is payed before or during the sale.
How does a creditor get a lien? Usually, they file a lawsuit and get a judgment against you. The easiest way for a creditor to get a judgment is for you to do nothing when you are sued. If you receive notice that a creditor is suing you, contact an attorney immediately. You want to do everything possible to avoid having a judgment filed against you.
If a creditor gets a lien on your home and amount of the lien plus your mortgage is more than your house is worth, it may be impossible to sell your home.
If you have enough equity in your home to cover the judgment, the judgment creditor can have the sheriff sell your home to pay off the judgment.
Clearly, Liens Are Bad News.
What can you do if your property has a lien? File bankruptcy. Although the bankruptcy alone will not get rid of the judgment lien, we can file a separate action inside the bankruptcy to get rid of the judgment lien in most cases. This additional legal action requires some additional cost, but it is absolutely worth it to get that lien off your home.
Have questions? Give us a call. It’s free, confidential, and there is no obligation.