Can a default judgment lein be legally placed on my real estate?

I had an unsecured credit card debt that I attempted to negotiate settlement with he bank card company but without success. The interest rate jumped to 29% . I had settled another card balance at 23% of the balance but they wouldn’t listen to my offer on this one. The account was charged off and has been sold several times, probably for cents on the dollar. I have 20 days to file an answer.

Asked on August 16, 2012 under Bankruptcy Law, Iowa


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes, such a judgement can result in a lien being filed on your property. It doesn't matter what the present creditor paid for the account. The fact is that "junk debt collectors" as they are known, pay for many accounts on which they will never collect. So if they pay pennies on the dollar and happen to collect on just a few accounts, that's their profit; it perfectly permissable under the law (as long as they follow legal collections practices).

That having been said, such a lien typically does not result in a property being sold. Rather, the lien remains on the property until it is either refinanced or sold. The creditor will then be paid off out of the proceeds (however interest will accrue until then).

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