Expert: Ontrack Financial Group llc - 8/18/2009

Question
QUESTION: Thank You for this valuable service. In the state of il. i have a 95k mortgage with a tax assesment of 140k, and about 45k in equity, however i have credit card debt of about 70k. This debt is about to be discharged or be taken over by collection. If this cc debt becomes a judicial lien against my house (which is still current on the mortgage) be turned into a secured debt against my house? Thus, can the (judicial liens) force my house into forclosure? Thank you again for your time in this matter. Joe.

ANSWER: Dear Joe,

Thank you for your question.  

Very few consumers lose their homes because of delinquent credit card debt. In fact, I would say that it almost never happens, except in certain bankruptcy cases in which the consumers voluntarily gives up his or her home. While forcing the sale of a consumer's home due to credit card debt is technically possible in some states, it is a very costly and risky undertaking for creditors. In addition, forcing the sale of debtors' homes would be extremely bad public relations, as many people would be much less likely to use credit cards if they thought it could cause them to lose their homes. Unless your financial situation is somewhat extraordinary, you probably do not need to worry about losing your home due to credit card debt. Only if you own your home outright, or if you have a very large amount of equity in the house, could the taking of your home become a concern. Even in those cases, it is extremely unusual for credit card companies to seize property due to the time and cost involved.

How far past due is your credit card debt?

Michael Moore
Ontrack Financial Group

---------- FOLLOW-UP ----------

QUESTION: One last question, as i don't want to abuse this wonderful public service. My main concern with a forced judicial forecloser comes about when the cc banks bad debts are sold to (collection agencies) for pennies on the dollar. I've heard they are very aggressive and that's when i fear they will force a forcloser. In that case, there would be no P.R. involved with with the primary lien holding banks such as B.A., Chase and Discover. Thank you for your time and i look forward to your response. Joe.

Answer
Dear Joe,

Thank you for your question.  We're glad to assist you.  

Debt collectors are aggressive, however there are laws on the books that will protect you.  I think it's premature to worry about something that may take years to happen.  In the event a debt collector tries to force foreclosure you have options.


Warm Regards,    

Michael Moore

Ontrack Financial Group llc