Can A Creditor Other Than My Mortgage Company Take My Home?

can creditors take my houseIf you have fallen behind on paying your bills, you may be wondering if you could lose your home. When facing financial turmoil, this is naturally what folks fear most. Fortunately, your home is safe from any creditors who do not have a mortgage or lien on it. Credit card companies and other unsecured loan holders can’t come and simply take your property or home after missing a few payments.

A creditor will first start making collection attempts by mail, phone calls or other methods. If these attempts are unsuccessful, there is a good chance that they will file a lawsuit against you. By doing so, the creditor is hoping to get a judgment which would allow them to transition from being an unsecured creditor a to secured creditor.

A judgment is issued by the court, and it states that the creditor has won the lawsuit and has a right to collect a specified amount of money from you. A creditor can get a judgment against you if you don’t respond to a complaint, don’t comply with a judge’s order, lose a summary judgment motion or lose a trial. Once a judgment has been issued, you become a judgment debtor and they become a judgment creditor.

They can now try to repossess previously exempt property to collect what you owe. Through a process called execution, the creditor can collect this money and may even seize your personal property so that it can be auctioned off to pay the judgment. In most cases, a lien cannot be put on your home for an outstanding debt. However, there are a few exceptions where a creditor can force the sale of your home:

  • Federal, state, counties and municipalities attempting to collect on past due property taxes.
  • Creditors to whom the property was specifically pledged as credit for a mortgage.
  • Contractors, electricians, builders and others who you owe money to for building, repairing or upgrading your home.
  • A creditor with an existing lien on your home.

In the state of Florida, you can protect the home you live in from creditors who do not hold a mortgage on the home through the homestead exemption. It can help you protect or exempt your home and land from being seized. If you file for bankruptcy in Florida, you can protect the entire value of your home through the homestead exemption. You must complete an affidavit with information about your home and claim it as your homestead. (Note that this is different from the homestead tax that you file with the property appraiser each year.)

If you’re in debt and are worried about the possibility of losing your home, it’s critical that you speak to lawyers specializing in bankruptcy and consumer rights. For bankruptcy in Jacksonville, the lawyers at Parker & DuFresne can help you navigate this emotional and complex situation. Contact Parker & DuFresne today to determine the right path to protect your home and property from creditors. Call (904) 733-7766 or visit www.jaxlawcenter.com.

Sources:

https://www.consumerfinance.gov/ask-cfpb/what-is-a-judgment-en-1381/
https://www.floridabar.org/public/consumer/tip006/
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0100-0199/0196/Sections/0196.131.html