Can Credit Card Companies Put a Lien Against Your Home?

Credit card companies have a number of different ways of collecting money owed to them by account holders. Initially, a credit card company will assess punitive fees and rates of interest. However, if the debt is still not paid, companies will often escalate to more severe tactics, such as seeking a civil judgment against the debtor and then attempting to either freeze their bank account or garnish their wages. They cannot, however, place property liens, without first receiving a civil judgment.

Credit Card Debt

Credit card debt is based a line of credit offered to a borrower by a credit card company. As with any other written contract, the borrower must abide by the terms set forth in his lending agreement with the credit card company. If the borrower fails to meet his obligations to repay the company, the company may file suit against him in civil court in an attempt to incur repayment.

Secured Debt vs. Unsecured Debt

There are two main types of debt---secured and unsecured debt. Some form of collateral backs secured debt. Under U.S. law, only a lender who has issued a secured debt is allowed to seize the designated collateral if the borrower fails to repay the debt. The vast majority of credit card debt is unsecured. This means that a credit card company is not allowed to seize any of the borrower's private property.

Civil Judgment

However, a credit card company also has the option of filing a lawsuit against the borrower in civil court alleging breach of contract. If the judge rules in favor of the credit card company and awards it damages, then the credit card company may pursue a number of alternate methods of collecting the debt. Among these options is petitioning the judge to put a lien on the borrower's property.

Liens

If a credit card company petitions a judge to place a lien on a debtor's house and the judge grants the petition, then the debtor will not be immediately forced to pay the credit card company any money. However, before the house can be sold or additional equity taken out, the debtor is legally required to pay off the lien. Whether a credit card company will go to the trouble and expense of petitioning for such a lien will depend on the company's policies and the size of the outstanding debt.