Can collection company put a lien on the house?

[broke2]

Hello...I just got a call from a collection company for one of my cc that went to charge-off last month, said that if I don't pay the balance they'll put a lien on my house the amount I owe. They also told me that they'll forced to short sale the house to collect the money (My house is almost 110k underwater). Can they do that? What will happen when I file ch13?

I'm planning to file ch13 within next 4-5mo. Just waiting to save some money for worst situation while I'm in ch13.

Thanks for your advice!

[LadyInTheRed]

They can get a judgment lien against the house, but they first have to sue you and get a judgment. The lien would be junior to the existing lien(s). The lien won't be very valuable to them and forcing a short sale would be pointless since they would get nothing after the commissions and superior lien(s) are paid. (I don't know if a they could force a short sale. I kinda doubt it.)

They are bluffing and trying to scare you. Even if they did what they said they would, they are very unlikely to sue you and get a judgement lien within 5 months.

Don't let them scare you. Stick to your plan.

[broke2]

They can get a judgment lien against the house, but they first have to sue you and get a judgment. The lien would be junior to the existing lien(s). The lien won't be very valuable to them and forcing a short sale would be pointless since they would get nothing after the commissions and superior lien(s) are paid. (I don't know if a they could force a short sale. I kinda doubt it.)

They are bluffing and trying to scare you. Even if they did what they said they would, they are very unlikely to sue you and get a judgement lien within 5 months.

Don't let them scare you. Stick to your plan.

Hi LadyInTheRed,

I'm also worried that my checking account is with the same creditor that the collection company is working with. If I close this account and open one with some other bank, what would be the impact when I'm ready to file ch13? Do I have to send statements to trustee about my old account including my new one since I'll be withdrawing all of my savings from the account? Or I just simply send statements from the new account?

Thanks!

[SMinGA]

Requesting bank statements, etc. depends on the district and trustee.

But there is nothing to say you can't change banks. Just keep the last few months worth of statements on hand from the existing bank 'just in case' you need them. (In a few months, the bank might require you to pay a fee to get them, while you can probably print them for free now.)

As to your original question - collection agents tend to say whatever they think will help them collect $. They don't know what they're talking about in most cases, perhaps not enough to even know they are full of it.

[researchnerd]

Grrr....scare tactics like that really piss me off. They cannot sell your house, much less short-sell it. They can put a lien on it, but they need to win a judgment against you in order to do that, which can take a while. You'll be served a notice well ahead of time if they file a suit. If you will be filing BK in 4-5 months, that will stop the process completely.

Changing banks is not a problem in BK, and in fact if you have your accounts with a creditor that's getting nasty, I'd recommend it (especially if it's Wells Fargo). As SMinGA wisely advised, print out your statements before you close your old account, just in case you need them -- but you may not. I've been in the BK process since May and my Trustees have not requested bank statements at all.