Lien placed on home by credit card issuer

[VSPeck1]

My friend lives in Kentucky. Several years ago she bought a condo when she was working full-time. Her health went south and she ended up having to retire on disability. She ended up declaring bankruptcy. Some time later she got a credit card and ran up about $4000 in charges. Her income dropped again and she couldn't pay it and the credit card company filed a lien on her condo. Between the fees and interest, the lien was placed for $14000. She is paying them $50 @ month but only has income is obout $1100 @ month. Her condo fees continue to rise and she is now paying around $700 @ month for condo and utilities and given her poor health, continues to rack up medical bills. She wants to try to sell her condo or refinance it but the value of the condo is less than what she owes due to the lien that has been placed. She doesn't know where to turn and wants to do the right thing but is becoming increasingly desperate. Some folks have told her to just let the condo go into foreclosure, but she then would be homeless and she has to live somewhere. If she could get the lien removed from her condo she could maybe refinance it and get her payments lowered so she could at least keep a roof over her head. What, if any, options does she have in the State of Kentucky?

 

[OHRoadwarrior]

She can negotiate payment of the lien. That said, it appears she does not have the money to do it. She could also attempt to refinance the money to release the lien in the refi.

 

[latigo]

My friend lives in Kentucky. Several years ago she bought a condo when she was working full-time. Her health went south and she ended up having to retire on disability. She ended up declaring bankruptcy. Some time later she got a credit card and ran up about $4000 in charges. Her income dropped again and she couldn't pay it and the credit card company filed a lien on her condo. Between the fees and interest, the lien was placed for $14000. She is paying them $50 @ month but only has income is obout $1100 @ month. Her condo fees continue to rise and she is now paying around $700 @ month for condo and utilities and given her poor health, continues to rack up medical bills. She wants to try to sell her condo or refinance it but the value of the condo is less than what she owes due to the lien that has been placed. She doesn't know where to turn and wants to do the right thing but is becoming increasingly desperate. Some folks have told her to just let the condo go into foreclosure, but she then would be homeless and she has to live somewhere. If she could get the lien removed from her condo she could maybe refinance it and get her payments lowered so she could at least keep a roof over her head. What, if any, options does she have in the State of Kentucky?

The lien you speak of undoubtedly came about when the amount your friend owed on the credit card account was reduced to a money judgment. (See: Kentucky Revised Statutes Section 426.720 “Final Judgment to Act as Lien on Realty)

Unfortunately for her there is nothing that can be done to have the lien removed short of satisfying the amount it secures. And unless it is satisfied it will remain as such for a period of 15 years from the date the judgment was entered.

HOWEVER, there is some better news. Which is that the only way the lien holder can get to the value of the property is by an action of foreclosure – the same procedure as a mortgage lender would take.

But if the lien holder does instituted a foreclosure action, it will be required to assume and pay the pre-existing mortgage and any other liens that attached prior in the time its judgment lien became of record.

Also, there are provisions under Kentucky law that grant certain qualified property owners a homestead exemption. And if she is entitled to that exemption, then it stands as a priority secondary only to the pre-existing mortgage. Meaning that in order for the foreclosing judgment creditor to gain any value from a foreclosure there would have to be a substantial equity involved. Which doesn’t appear here.

Please note that I’m not suggesting that she does have a homestead exemption. Kentucky law is not as generous in that regard as some states. Plus it is confusing and stingy. I do know this much from reading the Kentucky statutes and that is that they are not automatic as in other states. There is a filing procedure and if the claimant is under 65 and qualifies due to disability the filing must be renewed annually.

So I strongly suggest that she seek the advice of a local attorney that will be more familiar.

Personally I really don’t think there is much danger of the judgment creditor (credit card company) taking steps to foreclose its lien. It just wouldn’t be practical. And if were in her desperate financial straight, I wouldn’t be paying the 50 bucks a month.

But, these are just comments. Have her rely on the advice of her lawyer.

 

[latigo]

She can negotiate payment of the lien. That said, it appears she does not have the money to do it. She could also attempt to refinance the money to release the lien in the refi.

Geez! Have you considered trying to get in touch with your brain before you start babbling nonsense?

“ . . . the value of the condo is less than what she owes due to the lien that has been placed.”!!!!!!!

 

[OHRoadwarrior]

Geez! Have you considered trying to get in touch with your brain before you start babbling nonsense?

“ . . . the value of the condo is less than what she owes due to the lien that has been placed.”!!!!!!!

Have you gone into the property appraisal business also Latigo? Many times people think their property is worth the tax appraisal value and do not realize many market factors can affect that value. Before you continue babbling nonsense, I suggest we go back to the topic at hand.