Legal Question in Credit and Debt Law in Pennsylvania

Can credit card companys take a house for not paying the bill?

Asked on 4/11/13, 6:26 am

2 Answers from Attorneys

Greg Artim Morrow & Artim, P.C.

Not very likely. They would have to sue you first, win a judgment second. Then, the only way that they are going to "take a house" is if the judgment is for a similar amount to the value of the home. meaning, if you live in a $60,000 house, they are not going to take it if their judgment is only for $5,000.

They may be able to place a lien on the house, again, only if they win, depending upon ownership of the home.

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Answered on 4/11/13, 6:55 am

I agree with Attorney Artim for the most part. There is no homestead exemption in PA. However, you do do not indicate how the home is titled or if there is a mortgage or what its worth. Assets jointly titled with a spouse or which are financed with a mortgage/home equity loan are generally safe from seizure.

Judgments become liens on any real property owned by the judgment debtor. If and when the house is sold voluntarily, the lien could be enforced against the debtor's share of any equity.

Having a judgment has negative consequences though. The judgment earns interest at the statutory rate of 6% per year. I don't know how much a judgment or lawsuit would seek to recover, but interest can add up. Judgments are good for 5 years as far as execution purposes go and can be renewed for an additional 5 years. They are also enforceable against personal property for 20 years. However, they never go away until resolved by either bankruptcy discharge or paying/settling.

I would not worry about a home as much as I would be concerned about seizure of other assets if a judgment is entered. There is no wage garnishment in PA but creditors will look for low hanging fruit. The easiest things to grab are bank accounts and cars that worth at least $10,000 and owned free and clear and are titled solely in the name of the judgment debtor. PA only allows a debtor to keep less than $300 in any one bank account (unless the debtor gets exempt income like Social Security). Having a joint bank account does not help; creditors can still raid the bank account. I would advise the judgment debtor not to have any joint bank accounts with anyone unless both the debtor and other person have exempt income.

The best option would be for the judgment debtor to resolve the debt (assuming its gone to a judgment already). If you are interested in resolving your debt in a non-bankruptcy non-litigation context, I can review your situation with you and give more specific advice. Please contact me at [email protected]

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Answered on 4/11/13, 12:33 pm

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