Can a creditor put a lien on a jointly owned house that is already under HELOC? 7 Answers as of December 07, 2012My dad is being sued by debt collector for around 15k and already received a court summon. My parents both own the house, but are still trying to pay off 40k for the HELOC and a lien would add more financial burden. He is retired and have no source of income.
Tom Scott & Associates | John Hauber
Whether a creditor can attach a judgment lien to real estate is wholly unrelated to whether there is already a mortgage (or other encumbrance on the real property. The test is how the real property is deeded and against whom the suit is filed. In Indiana, the moment that a creditor obtains a judgment against a defendant, that judgment becomes a lien on any real estate that the defendant owns in that county. However, if a married couple owns the real estate as "tenancy by the entireties" (which is different from joint tenants or tenants in common) and the complaint was only against one of the two parties on the deed, then the lien cannot attach. The first thing to do is obtain a copy of the deed and determine how the property is titled. If your parents were married prior to owning the real estate then there is a good probability that the property is held as tenancy by the entireties.
Answer Applies to: Indiana
Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
A lien can be put on the property but the creditor must stand in line behind the mortgage holder or LOC. A lien doesn't mean any money is paid out now only if the property is sold or refinanced. A real estate lien is valid in MA for about 6 years which can be renewed.
Answer Applies to: Massachusetts
Park Law Offices LLC | Kevin Parks
Yes, if a creditor sues and obtains a judgment, they can place a lien again the property, regardless of whether there are other encumbrances (HELOC or otherwise) in addition to the mortgage. If you father is being sued by a creditor, he should consult with an attorney. While it's possible he may have defenses or even counter-claims available, it seems likely that he could negotiate a settlement with the creditor and resolve this matter. Settlements usually require a lump sum payment, but are often preferable to creditors when faced with debtors with no income or other assets to garnish/levy (such as real estate that has a lot of equity.) A variety of firms, including my own, handle these matters regularly. While terms are specific to the circumstances and facts of each case, it's not uncommon to reach agreements ranging from anywhere from 25-50% of the principle, and occasionally even better. Setting up a consultation with a consumer law attorney is the only way to fully investigate what options may be available in this instance, however.
Answer Applies to: Oregon