What's wrong with just getting a judgment lien?

[stressedinTN]

I was told doing nothing was a viable option. The worse case scenario was a judgment lien, but I was told it was doubtful they would try to execute it. The maximum amount would be $7000, but I think once late fees, interest, etc. accumulated it would be more. But what if there are a couple of relatively small judgment liens on a house? Does that change the odds of execution?

What are the practical consequences of a judgment lien? Is your insurance less likely, or just as likely, to be nonrenewed as when you declare bankruptcy?

Would it make it harder forever to get a car loan if a judgment lien is on your house?

How would hte judgment lien affect your ability to see the house in 10-15 years?

Thank you!

[LadyInTheRed]

A judgement lien will be on your credit report and will make it more difficult to get credit. 2 judgement liens will be even worse for your credit. It won't keep you from selling the house as long as you can sell it for enough to pay off any superior liens and the judgement. The amount of the judgement will grow because it will accrue interest. That could be a lot of money in 10 to 15 years.

You will be able to buy a car but probably won't get the best rates.

Depending on state law, if a creditor gets a judgement, they may also be able to garnish your wages and attach your bank accounts.

If you decide to allow a judgement to be entered, don't make the decision based on an expectation that the lender won't execute the judgement. You can't predict with any certainty what the creditor may do.

[stressedinTN]

Do you think bankruptcy would be better? My gut instinct is while bankruptcy will hurt my credit rating for awhile and make loans really hard in the immediate aftermath, that ultimately I can put it in the past. My income is SS, so it's exempt.
Thank you so much for sharing your wisdom! Invaluable!

[LadyInTheRed]

I can't tell you whether it is better in your particular situation to file BK. BK is the quickest and most certain way to put the debt in your past. Have you been sued yet? You could wait to be sued before making a decision to file BK.