Can Credit Card Companies Put a Lien on Your House?

Over the past two years, the Fed raised its benchmark interest rate 11 times. This has pushed mortgage rates to a 23-year high and increased the variable APR banks charge on credit cards. Combined, this has created a one-two punch for many homeowners still pressing against the headwinds of inflation.

If you’ve found yourself delinquent with your credit card payments, you’re not alone. A growing number of consumers are finding it difficult to put money toward debt, which raises the question: Can credit card companies put a lien on your house?

Credit card debt in America reached a cumulative record high of $1.13 trillion last year.

In this post, we clarify what has to happen before credit card companies can place a lien on your property. We’ll also provide expert insights from a top attorney about what actions you can take to protect your home.

Editor’s note: This blog post is meant for educational purposes, not legal advice. If you need assistance resolving a credit card company lien on your house, HomeLight encourages you to contact your own advisor.

What does it mean to have a lien on your house?

Rajeh A. Saadeh, founding attorney of a major law office in New Jersey, explains that a lien on your house is a legal claim against your property made by a creditor as a security for a debt.

“It essentially allows whoever is owed money to be able to secure that loan with a type of interest in the property. So, whoever owns the property still owns it, but that ownership could be taken to satisfy the debt,” Saadeh says. “Or if the property has to be sold, in order for the buyer to get clear ownership of that property, that has to be paid off or removed. So, that’s essentially what a lien is, it’s a security.”

Liens can be placed by various entities, including the government, construction companies, or in some cases, credit card companies.

Can credit card companies put a lien on your house?

Yes, credit card companies can place a lien on your house, but it’s not a straightforward process. Saadeh explains that for a credit card company to secure a lien, they must first sue you for the unpaid debts and win a court judgment.

“They will get what’s called a judgment, and once that judgment is docketed or recorded, they can register it as a lien against your property,” he says.

Saadeh points out that this is more common with secured debts. “Credit card debts are generally unsecured. That means they are typically not secured by ownership of any asset, such as real estate.”

This means putting a lien on a property is less direct and often considered a last resort. But it does happen.