I Have a Lien Against My House for an Old Debt. – Joanne

“Dear Steve,

I had a judgement from a credit card against me, I filed for chapter 13 , but the plan was dismissed early. I saw on my credit report that the judgement was there but the company never contacted me. My wages were never garnished etc

While going through my paperwork I found a letter from the sheriff that said credit card had a lien on my property. So today I investigated it, and sure enough there is an 11,500 lien on my property. How do I handle this? Do I pay them the 11,500,

Or do I try to have my bankruptcy lawyer negotiate with them? Additionally this was filed in 2010 so will I be charged interest on that amount?


closeup of a gavel on cash, from above

Dear Joanne,

In order for them to get a judgment they had to sue you. So the timing is the issue here. If they sued you and got the judgment before or after them time you were in the chapter 13 then that seems like it would be not a problem. There would be nothing for your former bankruptcy attorney to deal with.

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If they sued you or got the judgment when you were in the chapter 13 bankruptcy, that would be a problem and something your bankruptcy attorney could address.

Typically a judgment will sit and earn interest at the rate set by your state,

You can always try to negotiate with them to settle the debt. They may be interested in cash in hand today rather than waiting for some point in the future when you sell your house.

If you do negotiate a settlement, make sure you get the offer in writing and they the lien holder agrees to notify the court the lien was satisfied and should be released. Also make sure they agree to not pursue you for the remaining balance not paid.

If this came as a surprise, it might be a good idea to get a copy of your consolidated credit report and see what else might be out there.

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Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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