If you take money from your credit card to buy a house, can you lose the house?

[GMAN777]

What is the name of your state? NEW YORK
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A cousin of mine has recently bought a house for $50,000. She bought the house outright (i.e. no mortgage). She got the whole $50,000 from her credit card companies. I am telling her that the Credit Card Companies can sue her and take away her house. She says that all of the Credit Card Debt she has is unsecured debt so the only thing they can do is obtain judgements and have liens put against the house. Is this true?

My real question is: are there circumstances under which credit card companies can, in fact, lay claim against a house? If you would please provide me with a list of such special circumstances, I will greatly appreciate it. Or, if you can point me to a place on the internet where I can find such a list, that would be great. Thanks

 

[HomeGuru]

What is the name of your state? NEW YORK
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A cousin of mine has recently bought a house for $50,000. She bought the house outright (i.e. no mortgage). She got the whole $50,000 from her credit card companies. I am telling her that the Credit Card Companies can sue her and take away her house. She says that all of the Credit Card Debt she has is unsecured debt so the only thing they can do is obtain judgements and have liens put against the house. Is this true?

**A: yes, it is true. And if I was the cc attorney, I would foreclose on the attached judgement liens which would mean essentially a foreclosure of the property to pay the debt. I would also include in the collection lawsuit several causes of action to include but not be limited to fraud, conversion, rico etc.
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My real question is: are there circumstances under which credit card companies can, in fact, lay claim against a house? If you would please provide me with a list of such special circumstances, I will greatly appreciate it. Or, if you can point me to a place on the internet where I can find such a list, that would be great. Thanks

**A: see above. You cousin is pulling a scam and you both know it. If the house is only a house with no land, there are other claims to be made under the UCC.

 

[GMAN777]

**A: see above. You cousin is pulling a scam and you both know it. If the house is only a house with no land, there are other claims to be made under the UCC.

Thanks for the reply.

I think she has a half acre of land as well.

A scam? that may be a grey area since she obtained money legally from the CC companies. Actually, they deposited the funds directly into her bank account because she had such good credit. Are they able to tell her what to do with the money they deposited into her bank account? I don't believe so.

As far as foreclosing on the judgement, is that really possible? Why don't credit card companies do that regularly? For example, I have an old high school friend who has owned his house for 30 years. ABout 15 years ago, he racked up $70,000 of credit card debt which he was unable to pay (well actually, it was his gf who used his card without him knowing...or so he says). Now he has a lien on the house. They never forced him to sell. They never forclosed on the judgement. Why not?


Also, what does the United Church of Christ have to do with any of this? the UCC?

Thanks again

 

[HomeGuru]

Thanks for the reply.

I think she has a half acre of land as well.

A scam? that may be a grey area since she obtained money legally from the CC companies. Actually, they deposited the funds directly into her bank account because she had such good credit. Are they able to tell her what to do with the money they deposited into her bank account? I don't believe so.

As far as foreclosing on the judgement, is that really possible? Why don't credit card companies do that regularly? For example, I have an old high school friend who has owned his house for 30 years. ABout 15 years ago, he racked up $70,000 of credit card debt which he was unable to pay (well actually, it was his gf who used his card without him knowing...or so he says). Now he has a lien on the house. They never forced him to sell. They never forclosed on the judgement. Why not?

**A: I don't know what not. Why don't you ask them?
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Also, what does the United Church of Christ have to do with any of this? the UCC?

**A: UCC in this thread means Uniform Commerical Code.
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Thanks again

**A: the minute the monthly credit card bills can not be paid in full as agreed, then it's a scam.

 

[GMAN777]

**A: the minute the monthly credit card bills can not be paid in full as agreed, then it's a scam.

My cousin has been keeping up with her credit card payments, as far as I know. She has such low rates: some as low as 1.99% for the life of the loan. Seems like she's better off having done it this way than through a mortgage company.

Is it not fair to assume that if they could, then they would foreclose on a judgement? If they could, I imagine they would have taken his house but instead they put a lien on it. If it was so easy for CC companies to foreclose on judgement liens to pay back unsecured debt, then I imagine they would be doing it more often. In that case, why is unsecured debt even considered unsecured debt if they can wind up taking your house anyways? Legally, my cousin says, an owner of a house can not be forced to sell his/her house to pay off unsecured debt.

Forgive me here but I am playing devli's advocate. I really want to get down to the truth of the matter so I can contribute something meaningful to our conversations next time we meet. I was the first one to tell her not to do it when she came up with the idea.

Thanks again

Thanks once again

 

[HomeGuru]

My cousin has been keeping up with her credit card payments, as far as I know. She has such low rates: some as low as 1.99% for the life of the loan. Seems like she's better off having done it this way than through a mortgage company.

Is it not fair to assume that if they could, then they would foreclose on a judgement? If they could, I imagine they would have taken his house but instead they put a lien on it. If it was so easy for CC companies to foreclose on judgement liens to pay back unsecured debt, then I imagine they would be doing it more often. In that case, why is unsecured debt even considered unsecured debt if they can wind up taking your house anyways? Legally, my cousin says, an owner of a house can not be forced to sell his/her house to pay off unsecured debt.

Forgive me here but I am playing devli's advocate. I really want to get down to the truth of the matter so I can contribute something meaningful to our conversations next time we meet. I was the first one to tell her not to do it when she came up with the idea.

Thanks again

Thanks once again

**A: there is more to this story and you know it. What exactly is your MO for writing? Lastly, it is quite obvious that you have no knowledge of credit card and debt laws. When a creditor goes to court and obtains a judgement lien, the notice of judgement appears on record and the lien appears/ is attached on title to the real property. Once the lien attaches to the property title, it becomes a secured debt. Do more research please.

 

[justalayman]

Well as long as the card payments are kept up it is a moot point and an effort in hypothetical theory analysis.

but fall behind on the cards a bit
off to the courthouse the creditors, they'll get

So when the collectors come a knockin'
The back and front door you'll be lockin'

cuz they'll get a judgement that I'll bet
and without a house you'll get all wet.

 

[GMAN777]

**A: there is more to this story and you know it. What exactly is your MO for writing? Lastly, it is quite obvious that you have no knowledge of credit card and debt laws. When a creditor goes to court and obtains a judgement lien, the notice of judgement appears on record and the lien appears/ is attached on title to the real property. Once the lien attaches to the property title, it becomes a secured debt. Do more research please.

Thanks for the reply.

I think you are confused about the difference between secured and unsecured debt. In that case, let me educate you a bit:

UNSECURED DEBT: debt is not secured by any real property.
SECURED DEBT: debt is secured by real property

In the case where you fail to pay unsecured debt, a judgement lien is attached to your house but THEY CAN NOT FORCE YOU TO SELL.

Now this I am absolutely certain of. What I am not certain of is whether there are special circumstances under which they can force you to sell.

Would someone more knowledgeable than HomeGuru please respond? Thanks

 

[GMAN777]

Well as long as the card payments are kept up it is a moot point and an effort in hypothetical theory analysis.

but fall behind on the cards a bit
off to the courthouse the creditors, they'll get

So when the collectors come a knockin'
The back and front door you'll be lockin'

cuz they'll get a judgement that I'll bet
and without a house you'll get all wet.

a judgement places a lien on your house. So if you sell, then you will be required to pay off the lien before obtaining payment.

Under what circumstances can they force you to sell your house to pay off your credit card debt? Thanks

 

[HomeGuru]

Thanks for the reply.

I think you are confused about the difference between secured and unsecured debt. In that case, let me educate you a bit:

UNSECURED DEBT: debt is not secured by any real property.
SECURED DEBT: debt is secured by real property

In the case where you fail to pay unsecured debt, a judgement lien is attached to your house but THEY CAN NOT FORCE YOU TO SELL.

Now this I am absolutely certain of. What I am not certain of is whether there are special circumstances under which they can force you to sell.

Would someone more knowledgeable than HomeGuru please respond? Thanks

**A: oh brother, that's it. I am not wasting my time on you anymore.
I am on your side you idiot. I am the one helping you prove your point. But not any longer.
Pay an attorney to tell you the same thing. Bye bye and have a nice foreclosure.

 

[HomeGuru]

a judgement places a lien on your house. So if you sell, then you will be required to pay off the lien before obtaining payment.

Under what circumstances can they force you to sell your house to pay off your credit card debt? Thanks

**A: is there not a fishy smell around here>>>>>>>>>>>>>?

 

[GMAN777]

**A: oh brother, that's it. I am not wasting my time on you anymore.
Pay an attorney to tell you the same thing. Bye bye and have a nice foreclosure.

Thanks for all your help but I really need someone with more experience. HomeGuru, you didn't even know the difference between secured and unsecured debt. No offense. Thanks for trying at least. I appreciate it

 

[Debt Guy]

G

What a creditor can or cannot do is a function of the laws of your state. I am not a NY resident (assume you friend lives in NY) and my impression has always been that NY statues are stacked in favor of the creditor.

In the event of a default, you can bet your last nickel that the creditors are going to allege fraud. In my opinion, they will be right on the money because it sounds to me that you and/or your friend are trying to figure out a way to "steal" money from the credit card company.

Regardless of my opinion, it all really depends on what the judge believes. If the judge thinks there is fraud, then the judge will allow a "the veil to be pierced" and thus a foreclosure will ensue.

In the best scenario and assuming the credit card company loses the fraud issue, they will be awarded a judgment which will then attach to the real esate. Again, I am no expert on NY law. In most states a judgment creditor cannot force a foreclosure. But, they sure as heck cloud the title of the real estate. Which means when you go to sell the property, the judgment must be paid, complete will all the accured interest and costs -- which at default rates will be outrageous.

Judgments also lead to wage garnishments and bank levys. Judgments in NY last 10 years and can be renewed for another 10 years. 20 years is a long time to have this hanging over your head -- especially if your daily wake-up call if from the judgment creditor.

You came on this site asking for advice. You have been given advice from several people. Don't be in a snit if you did not get the answer you wanted or you think the advice is wrong. Only an idiot would rely on advice from strangers on the internet anyway. Hire a lawyer it you want advice you can take to the bank. Otherwise, quit carping.

 

[seniorjudge]

Thanks for all your help but I really need someone with more experience. HomeGuru, you didn't even know the difference between secured and unsecured debt. No offense. Thanks for trying at least. I appreciate it

Go back and read HG's answers to you.

Then apologize.

 

[Happy Trails]

Go back and read HG's answers to you.

Then apologize.

I don't think GMAN777 read the answer enclosed in the quote, in HG's first response.


...or maybe he did and didn't understand it.