Q: Is it legal for a credit card company to place a judgment lien on my and my husband’s property?

Our Atlanta property is a homestead, but the homestead wasn’t filed until after the creditor judgment was granted.

The credit card account is in my name only. My husband recently tried to refinance our mortgage and applied in his name only, due to my poor credit. He was approved but when the title company got involved, they couldn’t make the switch due to the “hold” on our property by this credit card company.

I also understand that if we ever sell the home, the credit card company would be able to take the proceeds of the sale to satisfy my outstanding debt with them. Is this true?

I can’t work due to serious health issues. I have been in and out of the hospital and have no income. We have never been delinquent on our mortgage, and never plan to be. We would simply have to do without something else if it ever came down to that. I was always very proud of my past excellent credit rating. I never dreamt I would one day be facing bankruptcy. I don’t see how I will ever be able to pay most of my creditors in full. However, I am so broke I cannot even afford to file it!

If I am ever able to file, would this remove the judgment, and therefore the “hold” on our property? My husband would not file with me, and I would not include our home in the bankruptcy.

A: I’m sorry you are having health and financial difficulties. Unfortunately, health issues frequently lead to financial problems but we’ll have to deal with the many issues raised in your letter one by one.

If you have a credit card and owe money on the card, the credit card company can sue you to force you to repay any debt you owe the company. If they sue you and win, the credit card company can place a lien on your property and other assets that you own. It sounds like this has happened to you.

You may have owned the home along with one or more people, and made your current home your homestead by making it your primary residence. The added wrinkle is that the home is also owned by your husband. Even if the credit card debts are only yours, the credit card company has the right to file a lien on the home. The lien would only attach to your ownership interest in the home. But, nonetheless, it is still a lien on the home.

So the answer to your first question is that a lender does have the right to lien your interest in your home. As you and your husband own your home together, refinancing the home with the credit card company’s lien on it is going to be difficult.

You may wish to consider a service like Consumer Credit Counseling Service of Greater Atlanta (www.cccsinc.org) or a similar company to help you with your options. But make sure that the company you go to is reputable. In most cases the information and assistance they provide will be free.

Finally, if you are considering bankruptcy, before you file you should talk to the credit card company to see if they are willing to settle your debt for some amount that is less than you owe. If they know your only other option is to file for bankruptcy, they may be more willing to settle the debt.

After you’ve sat down with a credit counseling service, you may have a better idea of what your options are and how you need to proceed. If you only have this one creditor, you may still be able to work your way through the debt maze. But without earning any money, you will have to rely on your husband’s income.

If you decide you have to file for bankruptcy, you may need to seek help from a competent bankruptcy attorney. If you cannot afford one, talk to someone at your local legal aid clinic.

Published: Aug 22, 2006