Can creditors go after your primary home after filing for BK ?

[coffeebreak]

My sister has a paid-off home but she's in trouble because she is currently in school / no job /no income and so she maxed out her credit cards to pay for her bills. (she got money when her husband passed away so that's where she got the money to pay off her house ) Now she received a summon from one of her creditors and she wants to file bk 7. However when she consulted with a lawyer she was told that her creditor would file a lien on her house since it's paid off ?!? REALLY ?? I never thought a credit card company would have a power to put a lien on her house, especially her own home.

and What would happen if the creditors place a lien on her house ?
Can she settle maybe a minimum payment with them or so ? or if she files for bk willt he creditors stop going after her ?

She purchased the house (in CA) for about $500,000 now it's probably only worth about $ 350,000

[JackBondLove]

Absolutely! If a debtor gets a judgement for debt, there is a standing court order that allows the creditor to put a lien on any registered property (i.e., real estate or an auto or boat, etc.), as well as force confiscation for any non-exempt liquid account (i.e., checking account, non-IRA brokerage account, etc. The judgement could not force the sale of the house, but the lien would make the house unsalable and ultimately open to confiscation at *her* succession. Obviously the debtor could simply run a car until the wheels would fall off, at which time she could give the car to the court.

Filing BK would cause there to be a stay on any debt court case. The problem here is that there may be a problem both with the equity value of her house, as only a certain amount would be exempt - and thus she would be forced to fork over any amount in excess of the exemption, or be subject to the BK trustee confiscating her house if she would not! There could also be a problem in the timing of her receipt of the succession of her spouse (although I think that would not be the case, since spousal inheritance is considered so sacrosanct.)

[keepmine]

She has far too much equity to file a Chapter 7 and a Chapter 13 requires her to have a reliable source of income. Bk isn't a solution for her.

[BCA2009]

It's a shame she's not in florida, 100% of the equity in the house would be exempt if she filed BK. At 350K of equity, can she sell the house pay off the debt and buy a much smaller house? Sometimes we just have to take our lumps and move on.

How much debt does she have?