Can a bank put a lien against our personal assets? 24 Answers as of May 31, 2013

A client asked me the following: "If my wife and I give our motor home back to the bank because we're 'upside down' with it, can the bank put a lien against our personal assets?" Such as bank accounts, retirement accounts, our home?

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Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
Yes, a bank can put a lien against assets, particularly if the bank has obtained a judgment against you. Chapter 13 Bankruptcy relief may be a good solution to stop asset seizure.
Answer Applies to: Indiana
Replied: 12/14/2011
Bankruptcy Law Center
Bankruptcy Law Center | Bill Zurinskas
A voluntary repossession of an "upside down" vehicle in Colorado will usually result in a deficiency after the sale of the vehicle. What that means is that after the public sale of the vehicle at a loss, the creditor will demand from you whatever the loss may be. To collect the deficiency, the creditor must first bring a lawsuit and get a judgment. Once a creditor has a judgment, then the creditor has the power to garnish wages and bank accounts and place liens on your real estate. Retirement accounts are normally exempt under Colorado exemption law.
Answer Applies to: Colorado
Replied: 12/12/2011
Rhonda R. Werner Schultz, PL
Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
If the bank obtains a deficiency judgment for the difference between what was owed on the motor home and the amount it sold for, that judgment may be a lien against other assets. Wisconsin exempts certain assets from collection by creditors. Your clients should see a bankruptcy attorney to find out what exemptions they have and what options they may have to deal with the judgment.
Answer Applies to: Wisconsin
Replied: 12/12/2011
Weber Law Firm, P.C.
Weber Law Firm, P.C. | William Weber
No. The bank cannot put a lien against personal assets to recover a debt.
Answer Applies to: Texas
Replied: 12/12/2011
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
If you give up your personalty to the bank, it can file a lawsuit against you for a deficiency. After obtaining a judgment they can use methods to collect that are authorized under California law. Some of these mechanisms are wage garnishing or levy onbank accounts as well as other personal property. Some assets are exempt, such as retirement accounts. Also, they can file what is called an abstract of judgment, which is a lien that will attach to real property that you own.
Answer Applies to: California
Replied: 12/12/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    Yes, absent a BK, a creditor can sue, obtain a judgment then levy bank accounts personal assets. The creditor can also record the Abstract of Judgment at the County Recorder which will act as a lien on Real Property.
    Answer Applies to: California
    Replied: 12/12/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    "A Client" if this is an attorney you should know the answer. This site is for lay people only.
    Answer Applies to: Michigan
    Replied: 12/12/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Yes, if they sue you first, but don't have a bank account with the bank either.
    Answer Applies to: California
    Replied: 12/9/2011
    Law Offices of Robert P. Taylor
    Law Offices of Robert P. Taylor | Robert P. Taylor
    Generally yes, but the bank would have to sue you and get a judgment first. Then your retirement would probably be exempt as well as substantial equity in your home. If you have any accounts with the company that has the RV loan, they can probably take seize your accounts so you may want to move them. For example, if it's a B of A loan and you have B of A checking, they can take money straight from your checking to offset their loss. You should speak with a bankruptcy attorney, so you'll know how to best protect yourself whether or not you plan on filing.
    Answer Applies to: California
    Replied: 12/9/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Yes.
    Answer Applies to: Maryland
    Replied: 5/31/2013
    Albert Law Group
    Albert Law Group | Alvin S. Albert
    The bank can attempt to collect any remaining balance on the loan (after the motor home is sold) by normal collection means - which includes getting a court judgment.
    Answer Applies to: Georgia
    Replied: 12/9/2011
    Law Office of Bijal Jani | Bijal Jani
    It depends on the type of loan documents you had signed when you took out the mortgage. Generally, when homeowners give the deed back to the mortgage bank, it can be negotiated that no further deficiency judgments will be taken out against the homeowners. You should review your case and documents with an attorney to evaluate your legal rights.
    Answer Applies to: New York
    Replied: 12/9/2011
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    They can put a lien on anything if they have a judgment against you except for your homestead. Motor homes, however, cannot be a homestead property because of its mobile nature, unless it's grounded.
    Answer Applies to: Florida
    Replied: 12/9/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Are you the lawyer or the client? If you are the lawyer and don't know the answer to this basic question you need to find another area of law to practice in. If the creditor gets a judgment they can get an abstract of judgment which is a lien on all real property. If the judgement creditor sets an "Order for Judgement Debtor Exam" and the debtor does not show up, then there is a lien on everything subject to the normal exemptions. If you are the lawyer, get a book on creditor rights. Every lawyer practicing bankruptcy must have some basic books. Rutters is good because it focuses on California, the NCLC books are good too. I currently am suing one lawyer for bankruptcy malpractice and will probably sue another one in the next month or two. Join NACBA.
    Answer Applies to: California
    Replied: 12/9/2011
    Charles R. Nettles - Attorney at Law
    Charles R. Nettles - Attorney at Law | Charles R. Nettles
    If they sue you for the deficiency, they can take that judgement and do something called "Abstracting the judgement". You would then have a lien on your home. They can only take certain things but bank accounts are the most obvious target. They cannot touch your retirement including IRAs, 401k's or any other ERISA qualified plan. Having a lien on your home does not mean that they can take it or even seize the proceeds should you choose to sell it but it does give them a claim against it should you die.
    Answer Applies to: Texas
    Replied: 12/9/2011
    Heupel Law
    Heupel Law | Kevin Heupel
    Yes, a bank can put a judgment lien on your assets, but only after they sue you and obtain a judgment.
    Answer Applies to: Colorado
    Replied: 12/9/2011
    The Salas Firm
    The Salas Firm | Ron Salas
    The short answer is they can and they will; however, you may have other options, you should contact an attorney.
    Answer Applies to: Colorado
    Replied: 12/9/2011
    J.M. Cook, P.A. | J.M. Cook
    Yes, after a fashion. The client borrowed the money on a loan, in this case to buy a motorhome. It gave the bank a lien on the motorhome as collateral for that loan but the loan is the obligation and contract. So, if the client returns the motorhome, the bank sells it at auction and does not recoup all the costs of the loan and charges, they are entitled to sue the client on the loan as it was not satisfied. The judgment from the law suit will attach to property, personal and real, owned by the client, now defendant. The bank can then execute this judgment lien against the personal property through a sheriff's sale. However, some property is protected by the constitutional exemptions and are not subject to the judgment lien.
    Answer Applies to: North Carolina
    Replied: 12/9/2011
    Jakob-Barnes Law Firm, LLC
    Jakob-Barnes Law Firm, LLC | Jennifer Jakob-Barnes
    The bank would first have to sue for a deficiency balance. Once they receive a judgment, they can put a lien on both real and personal property.
    Answer Applies to: Georgia
    Replied: 12/9/2011
    Moore Taylor & Thomas PA
    Moore Taylor & Thomas PA | Jane Downey
    The creditor can sue for a deficiency unless the bankruptcy is filed.
    Answer Applies to: South Carolina
    Replied: 12/9/2011
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Yes, once you agree to a voluntary repossession of the motor home, it will be sold at auction. The lender will then pursue the debtors for the deficiency balance in all the normal collection methods, such as judgment, lien, garnish salaries and freeze bank accounts.
    Answer Applies to: New York
    Replied: 12/9/2011
    Mazyar Hedayat and Associates
    Mazyar Hedayat and Associates | Mazyar Malek Hedayat
    The short answer to your question is "Yes." A creditor can secure a lien against all property in the amount of any deficiency. But the longer answer to your question is that a creditor can only turn that lien into cash and satisfy what is owed by securing a judgment, filing a certified copy (creating a lien), and foreclosing that lien in order to marshall and sell your assets. That is a long way to go and involves time and expense. In addition, certain assets such as retirement accounts are exempt from execution, and even exempt from a Trustee in Bankruptcy. Contact your Attorney to find out how to protect your assets legally and how to seek bankruptcy protection if it becomes necessary.
    Answer Applies to: Illinois
    Replied: 12/9/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    The bank could get a garnishment against your bank accounts for any deficiency. Ask them if they will forgive any outstanding balance? But expect that you will probably get a 1099 -Income in forgiveness of debt, on which you will have to pay income taxes. Good luck!
    Answer Applies to: Michigan
    Replied: 12/9/2011
    Sanders Law, P.A. | Andre Keith Sanders
    Yes, but the bank must go through courts and get a final judgment against you. You should have time to either make some type of settlement or payment arrangement to avoid this.
    Answer Applies to: Florida
    Replied: 12/9/2011
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