Credit card debt, unlike mortgage debt, is unsecured debt. This means your credit card company can’t come immediately take your stuff — including your home or car — when you don’t pay. Once an unsecured creditor obtains a judgment, they can then attach your non-exempt property in satisfaction of past-due debts.
What happens when a credit card goes into default?
After a credit card company determines that you’ve defaulted on your credit card, they may close your account and transfer your debt to a collection agency. When they do this, your balance is no longer associated with the credit card company, and you must deal directly with the collection agency.
What happens if you default on a credit card?
If you default on a credit card, the issuing company must file suit in court to obtain a money judgment against you. With a judgment, however, a credit card company is allowed to seek repayment from you through various means. Once a credit card company obtains a judgment against you, it could file a lien against your property.
Can a credit card company go after your house?
1. A credit card is an unsecured debt. That typically means that there is no collateral, and there is typically nothing you own that a credit card company can go after unless you are sued and the creditor or collector gets a judgment against you. Before that happens, you should be notified of the lawsuit and have the opportunity to respond.
How can I Lose my House over credit card debt?
First, you would have to be sued in court and lose. If that were to happen your creditors would receive a judgment against you ordering you to pay. If you could not pay, a card issuer could take further action to enforce the order. That is when you might face the prospect of losing your home.
Can a credit card company foreclose your property?
Legally then, a credit card company could foreclose your property in order to satisfy the debt you owe. It takes effort for an unsecured debt creditor to obtain a judgment and then successfully …
