Can a Lien Be Placed on Your Property for Unpaid Medical Bills?

Medical debt is one of the primary financial issues that plague many families today. When you get into medical debt, the medical provider can take a number of steps to try to get the money back from you. The creditor could file a lien on your property, but not without going through the proper channels first.

Lien on Property

When a medical provider places a lien on your property, it does not mean that it owns the property or that you have to move out. A lien on your property is simply a claim to that property by a creditor. When you sell your property, it will be impossible to do so without using part of the money to pay off your debt. You typically also have a certain amount time to pay the debt before the lender could foreclose on the property.

Getting a Lien

Before a medical provider can place a lien on any of your property, it must first get a judgment against you. This involves filing a lawsuit against you in civil court and then presenting a case to the judge. If the creditor can prove that you do owe the debt and that the debt is still within the statute of limitations, the court will issue a judgment against you. Once it obtains the judgment, the creditor can use it to file a lien on your property.

Interest

When a creditor places a lien on your property, the debt that is associated with the lien can earn interest. While you continue to own the property and do not pay off the lien, you will be charged a certain amount of interest by the creditor. When you sell the property, you will have to pay the original judgment lien amount as well as any interest that accumulated while you were still using the property.

Remedies

When you find yourself with a lien on property, you could pursue a few different options to get rid of it. The simplest solution is simply to pay the lien. Most creditors will work out a payment plan for you so that you can get rid of the debt and the lien. Once you pay off the debt, the creditor will remove the lien. Another option is to file for bankruptcy. This should only be done if you have a significant amount of debt and you do not think you will ever be able to pay it off. This will remove the liens and give you a fresh start on your debt.