Your unsecured creditors may be able to get a lien on your property, but only if they manage to get a court judgment against you. If your financial situation is dire, talk to an attorney about how bankruptcy can either help prevent or get rid of liens.
Secure vs. Unsecure Debt
Your secured creditors have an interest in an asset of value ("collateral"), which they can take and sell to recoup their losses if you default on your loans or payment arrangements. Both home mortgages and car loans are "secured" debt.
Your unsecured creditors extend credit to you, or issue you a loan, on the basis of your promise to pay them back. If you don't, they can't automatically take or repossess collateral to satisfy the debt, but must instead take you to court.
Court Judgments
If you and an unsecured creditor cannot work out a debt repayment plan, the creditor can sue you. If he wins the lawsuit, the court awards him a "judgment" which means that he can take legal steps to seize your assets to satisfy the debt. For example, a creditor could garnish your wages until you have paid off your judgment.
Liens
Once she has her judgment, your creditor can file a lien against your home or other property. This means that if you sell or refinance the property, your creditor can take any proceeds (up to the amount necessary to satisfy your debt) before you receive any payment.
Avoiding Liens
If a creditor gets a judgment against you, try to work out a repayment plan. Some creditors will work with you so you don't have to deal with bank account levies, wage garnishments or property liens. In cases where your debt is overwhelming, bankruptcy may be your best move: Filing for bankruptcy before a creditor sues you not only can prevent him from going to court and getting a lien on your home, but also can prevent a court judgment from appearing on your credit report. If a creditor already has a lien on your property, the lien can be treated by the bankruptcy court as a secured debt and may be given priority for repayment after your assets are liquidated or as part of your repayment plan. However, your lawyer may be able to help you avoid repaying liens as part of the bankruptcy process, depending on your state's property exemption laws and the nature of the lien.
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