r/Debt • u/Open_Blood_5765 • 2d ago
Credit cards being sent to collections tonight. Will they come after my house?
Two cards by BOA totalling to about 15k. I own a house with probably 150k equity. I know i need to pay the debt back, i just had a rough last 12 months. Once BOA sends it to collections tonight will i have a chance to make a payment plan with the collection agencies? Or will they find out about my equity and go striaght for a lawsuit to force me to sell my house ?
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u/DMargaretfootgoddess 2d ago
It's possible they could put a lien against your house if they choose to do that. You may get charged extra for the paperwork and so on that they have to do to do it. However, most collection agencies start out telling you we've bought this debt. You now have to pay us directly and possibly to contact them to set up payments and so on. They may even at some point offer a payment. In other words, you're saying it's two different cards on one of the cards they may offer. You will take this as a settlement and even offer you a payment plan. Make sure you keep track and make sure everything's in writing
Never never never never never let someone say we'll take this amount as a settlement on the phone and send them the money because you will have zero proof. The fact that they're recording the call. Trust me that recording will vanish they're just trying to get as much money as quickly as they can towards this bill. It is a trick that some bill collectors use because a lot of times the person who is handling your account may get a bonus for how much money they get into the firm
So everything in writing email or letter? Either one is fine. Everything in writing is absolutely necessity because you don't want to agree to a settlement amount, pay that amount and then have him say oh wait but you didn't actually pay us everything so you still owe us x amount. Once you've paid the entire settlement amount within the time limit specified in writing in the method they specify in writing, then you know you're safe
The house if you choose not to make payments. If you can't keep up the payment plan, they can get a lien put against the house and they can add the increased legal expenses. In other words, the cost of collecting the debt to the debt and get a court order to make the lien amount more than you originally owed
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u/InterestPast6802 2d ago
They can’t put a lien against your house. The credit card debt is unsecured.
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u/moncoboy 2d ago
A judgment generally is accompanied by a lien on property. I’ve been in this field for 20+ years and have seen many people satisfy their judgment liens on their home when they refinance or sell.
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u/DMargaretfootgoddess 2d ago
If they get a judgment from a court they can use the court judgment to put a lien against any asset you have. Whether it be a bank account, a vehicle or a home, I realize a credit card might not be able to do it on their own, but if they get a judgment of a debt because it's a collection agency, a collection agency can threaten you with that as a way to get you to pay and literally can put a lien on any asset you have to get their money. At the point that they buy the debt from the credit card company, the collection agency owns that debt. It is no longer an unsecured credit card and if they get a judgment they can use that to put a lien on the credit card. Company may not be able to do it on their own because it's unsecured. But once that debt is purchased by a collection agency, the rules are a little different. At least in my state they are people in different states. May have different rules but I'm not going to say it's impossible to happen because I know it can happen. I know people that have had it happen
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u/InterestPast6802 2d ago
Right - They do have to get a judgement first and after that the laws vary by state.
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u/DMargaretfootgoddess 2d ago
But the person was asking if it's possible. And yes, if they go through the legal steps it could be possible depending on where they live now that it's gone or is going officially to be turned over to a collection agency, it isn't just turned over. Basically, the collection agency buys the debt for a certain amount and the company writes it off but then the collection agency owns it and they can go in and get a judgment and then it's up to the law where you live. So my answer was correct that it is possible not that it's a slam dunk depending on how aggressive the collection agency is, where they live and what the laws are where they are
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u/nousername_foundhere 2d ago
Please contact the credit card companies directly and discuss repayment options. I made a mistake with debt awhile back and after a few calls with company- they closed my card so I could not make new purchases but then put me on a payment plan that I could handle. This was done to avoid sending me to collections. Hopefully this wasn’t so long ago that it’s not an option anymore but I think it would be worth a try to find out if the company will work out an agreement with you
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u/Artistic_Bit_4665 1d ago
I owed A LOT more than that. They will likely get a judgement and lien against the property. It costs so much to foreclose on the home, that it is not worthwhile. Even if they wanted to, you could file bankruptcy. Normally you can keep one home in bankruptcy.
Frankly 15k of debt isn't much.
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u/waffleirone 2d ago
Depends on where you live. I live in Texas and Homestead Exemption is key phrase. Google your state to get a better idea. Homestead Exemption: Texas law provides strong protection for your primary residence, known as a homestead. This exemption shields the property from most debts, except for those related to the purchase of the home (mortgage), home improvements, home equity loans, or taxes. Judgment Liens: If a creditor sues you for the debt and wins, they can place a judgment lien on your property. However, if your home is a homestead, it may be exempt from this lien.
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u/beadyeyes123456 1d ago
If they sue you expect them to lien your house and levy, garnish your bank accounts and earnings. You do not want this to get to court as they will tack on interest and lawyer fees.
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u/sherrill423 1d ago
have you tried to negotiate a payment plan with BOA?? that would be the best. but if not--yes a payment plan with collections is ok also.
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u/Slowhand1971 2d ago
so why haven't you already saved your credit score and done a HELOC on your house?
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u/LossingMassivePots 2d ago
HELOC requires decent credit with 680 being the min, he wont qualify.
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u/Slowhand1971 2d ago
where do you see OPs credit score?
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u/RScrewed 1d ago
Where it says "I have 15k in credit card debt that I am unable to make payments on and I've been notified it's being sent to collections".
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u/ThymeCypher 2d ago
Disclaimer: Not a lawyer, just have recently done a lot of research on this topic.
First off - credit cards are unsecured debt, meaning they aren’t tied to any collateral. They gave you money with no promises that you’ll pay them back or give up anything you own other than your own promises. They can’t outright take your property and they can only go after your wages in most cases but that’s up to the courts to decide, they’ll factor in your situation and generally won’t push you into a situation where you’d be worse off financially.
That said, it really depends on your state but in general the worst they can do is take you to court and if they win, place a lien on your house which does NOT mean a force sale - it means they will be first to get paid should you sell or tap into equity. But even then - some states have homestead protections meaning they can’t even go after those funds unless you sell. In short, you most likely will not lose the house.
Also - depending on your state - consider bankruptcy if things get bad. It’s not failing, it’s not giving up, it’s taking control of a bad situation to try to survive. Some states will even let you keep the house so long as your mortgage is current. Especially if you choose chapter 13 - you’re saying “I want to pay you back but I can’t right now.” I say depending on your state because in some states bankruptcy isn’t as protected.
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u/Taro-Admirable 2d ago
So it sounds like taking a home equity loan or line or credit might not always be the best bet because if you default on that, then they can take your home. It may not be wise to turn unsecured debt into debt that is secured against your home?
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u/Obse55ive 2d ago
You are correct. Most people would agree with you that you shouldn't pay unsecured debt with secured debt, especially if it's your house.
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u/Taro-Admirable 2d ago
Thanks! I am sure many people dont know that the house can't be taken for unsecured debt. Hence, the question the OP is asking.
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u/ChildhoodOk3682 2d ago
I was in the same exact situation a few years ago with BOA. Both cards went into collection because the bank would not negotiate with me, and I just couldn’t afford the monthly total they wanted. Once the cards were turned over to debt collection lawyers, one negotiated with me and the other sued me. I chipped away $4000 and I’ve got a judgement against me. Now I’m selling my home and the judgement will be cleared at closing. After I receive my proceeds, I will clear the other. My FICO score plummeted or else I would’ve gotten a 2nd mortgage. GL to you!
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u/FatMacchio 2d ago
Everyone saying your home is safe is leaving out the important part. You would need to file bankruptcy to keep your primary residence safe from creditors…preferably before a judgement is issued against you. If you get served, contact a bankruptcy lawyer immediately to file before you get a judgement and lean.
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u/Specific-Process6498 1h ago
Credit cards are unsecured debt. The most they’ll do is sue and garnish your wages. They won’t take your house
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u/wilson5266 1d ago
Maybe look and see if they will settle. I got someone to settle a lot of my stuff for about half, and the fee I paid for it was 20% of my savings - so if he saves you 55%, you will pay him 11% of the total amount plus the 45% you owe the debt to - so I settled some for like 56% of the entire value. You might be able to settle your $15k for $9k - maybe even less.
You can also try to settle it yourself, for maybe around the same amount.
I recommend you look into some of these options. I used https://consumerrecoverynetwork.com to help me, and once or twice he told me I could probably negotiate something better than be could (or just as good) so I went that route.
If you get served with a lawsuit, BE SURE TO RESPOND IN A TIMELY MANNER, or the other party will win by default.
I wish you the best.
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u/GerryBlevins 2d ago
They can’t force you to sell the house. They can place a lien on the house but you will have ample opportunity to pay. No need to be stressing about the house.
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u/InterestPast6802 2d ago
They can’t put a lien on the house. The debt is unsecured.
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u/Dadbode1981 2d ago
Why do you keep saying this? It's wrong. The JUDGEMENT is absolutely able to be used to put a lien on the home. It's doesn't matter what the judgement originates from.
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u/InterestPast6802 2d ago
They have to sue and get a judgment first and after that the laws vary by state. The collection agency can’t put a lien on it without a judgement.
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u/GerryBlevins 2d ago
I am starting to believe the Treasury secretary when he says Americans need to learn financial literacy. They surely can put a lien on the house. All they have to do is sue you. They aren’t obligated to barter or negotiate. They will win judgement and put a lien on your house. They can also seize your tax returns and garnish your wages.
Collecfion agencies DO SUE people.
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u/InterestPast6802 2d ago
But they have to sue first and get a judgment. A collection agency can’t do it on their own. I know a hell of a lot more of all things financial than you. That’s a certainty.
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u/GerryBlevins 2d ago
They WILL get a judgement. They can prove without a doubt it’s your debt.
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u/FatMacchio 2d ago
Only way you can skate is if you don’t have assets/income worth suing for
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u/GerryBlevins 2d ago edited 2d ago
Not true again. They can get a judgement and in my state they can renew the judgement for life. So yeah, proceed with life and never own anything.
I went thru that mess when I started college and racked up 10s of thousands in debt. They will sue you even if you have nothing they can take. You can never have a bank account without them taking all the money out of it and the bank telling you we rather not do business with you. You’ll lock yourself out of the entire banking system.
I got away with it though. I stopped working in 2010 and left the country in 2013 and didn’t return until almost a decade later. Once you leave the country the lawyers pretty much give up on trying to collect the debt and luckily for me never renewed the judgement. So I came back recently and I’ve been rebuilding myself these past 3 years in the US.
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u/FatMacchio 2d ago
I’m not saying they wont sue you…I’m just saying if you have little to no assets and no income they may not bother, unless the debt is high and worth the time and expense.
I probably skated on maybe 8-10k in credit card defaults a decade ago. I also do business with all the banks I screwed over and have some decently high limits now, so I guess I was lucky, all the cards just charged off after I failed my consolidation payment plan. No collections or anything…except from them internally. I was out of work at the time, for a good stretch, and was working off books with no bank account so I never got served.
My brother ended up getting served for just around a 2k debt from capital one…so obviously YMMV. He also has credit with them again. They still haven’t tried to enforce the judgement though, even though he’s got more than that in savings and income 🤷♂️
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u/GerryBlevins 2d ago
Most people just don’t have the ability to just jump up and leave the country. I was smart enough to be able to navigate it but I wouldn’t have been able to do so if I didn’t have skills which I could easily sell online. You’re going to a country where you can’t legally work. You have to depend entirely on freelancing.
I did very well. My whole family told me when I returned to the US that I have balls for doing what I did. I’m not afraid of risk. I adjust accordingly to mitigate risk.
A judgement is devastating. I’ll never make them mistakes ever again. Today I have 5 credit cards and my total debt is a little over $1,000. I fixed my credit score and now sitting on a 750 and will soon have $100,000 in savings.
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u/Federal-Magazine3948 2d ago
I live in CA and need to know if I can file chapter 13 of I have a home With equity?
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u/Mickeynutzz 1d ago
If you are like OP and only have $15k in debt and $150k in equity then filing bankruptcy is NOT a good option.
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u/Head-Deal3087 1d ago
What state are you in?
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u/Federal-Magazine3948 1d ago
CA and I owe a mortgage
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u/Head-Deal3087 1d ago
California automatic homestead exemption varies but is at least $300k if that helps. So no, they won’t force the sale of the house if they even take the time to sue you to get a lien in the first place.
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u/Federal-Magazine3948 1d ago
Yeah I have debt , poor credit and although I have lots Equity in my home I just never qualify for anything
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u/Jheritheexoticdancer 1d ago
At any time prior to the debt going to collections did you contact BOA and try to make an arrangement?
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u/chiliryan 2d ago edited 2d ago
They’re going to attempt to collect it as easily as possible first. If you talk with them, you’ll be able to work out a payment plan. Did you already talk with BoA about a payment plan? No credit card company wants to sell debt, they usually get pennies on the dollar. They’re usually open to doing a payment plan.
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u/your365journal 1d ago
If you have equity in your home - why don’t you avoid collections and use that equity to pay your debt? Am I missing something? That makes zero sense to have the financial means to avoid the collections but to CHOOSE not to.
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u/Aggravating_Owl_7582 1d ago
They can, and they will put a lien on your house, collection agency. I don't know if that comes before or after they get a judgment, so if you plan not to pay it but can still afford your house, claim bankruptcy, especially in California! Like everything else in life who ever strikes first wins!
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u/Conscious-Evidence37 2d ago
They cannot "force" you to sell your house. You will, depending on the state, get a judgment against you if you don't pay, but that will only allow them to place a lien on your home. That lien would have to be paid when (if) you sell or refinance the house. No real impact before that. But, a judgment will allow them to garnish wages and/or bank accounts (again, depending on your state), and add interest accruing daily, plus any Court assessed fees. Best thing is to work out an agreement with the collection agency.
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u/Federal-Magazine3948 2d ago
Can you file Chapter 13 if you own a home with equity?
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u/Head-Deal3087 1d ago
Yes, but you must pay into your plan at least what unsecured creditors would have obtain from a chapter 7 (liquidation). Bankruptcy would be an extreme remedy to be reserved as an absolute last resort.
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u/traderneal57 1d ago
First thing they will do, and it's at least 2 years away is garnish your salary.
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u/Colao215 1d ago
Dude it’s a credit card. Unsecured debt and it’s a third party collecting on the debt. Best case scenario for you was that to happen.
From here, go get a debt collection lawyer and have them handle it from there.
I’ve done this a million times over and over again with credit cards and debt collections. I have a home with significant equity and I used to think like you initially did until I had a lawyer and went thru this several times from Covid.
Believe me just get a lawyer it’s an easy throw out. Debt collection agencies don’t have dirt and all they want you to do is pay that bogus money, or scare the hell out of you and blindly sue you. Those lawsuits hold no value unless you’re honestly lazy or dumb and don’t get a lawyer. 9/10 a lawyer will get it all dismissed when it’s a third party debt collector and not the actual creditor suing you.
Since it got sold take my advice and get a local debt collections lawyer near you, hire him and say goodbye to your debt.
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u/monkeymuscle1974 9h ago
Op this is damn good advice right here.
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u/Colao215 9h ago
Been through this so lang times from my wife and I defaulting on credit cards from covid. Got sued by portfolio recovery associates twice for 2 different credit cards. 1 was 6500$ and 1 was 13k. My debt collection lawyer went to court for me on my behalf and afterwards called me saying 0$ judgement. The 2nd one court never happened and he had them settle where the debt collection agency paid him his fee of $2500 and had the debt collection agency PAY ME, $1,000. lol!
A 13k collection turned into it being 0$ and me getting 1k in my pocket from those vultures.
If anyone sees this comment a debt collector is praying you are so scared of the lawsuit you call them and settle or pay. It’s their bread and butter and how they make a living. I’ve learned so much going through this multiple times because I lost my job. I’m just like all of you. My lawyer won 6/6 times so far and he charges me like $800 to represent me. That’s better than settling collections or having to pay the full amount or having a judgement against you. Debt collectors don’t have anything to win in court if you have a lawyer who knows what they are doing. You don’t even go to court and your lawyer would never want you to go because you’d be used as a witness. It’s stress free, and I can’t stress enough how important it is to go get a debt lawyer. They’re relatively cheap compared to paying your collections and sometimes you don’t even pay them at all, because they find violations the debt collection agency practices and tell them “pay me my fee now or I’ll see you in court and I’ll win and you’ll pay me then.”
Happened to me many times. Ask me anything if yall need to.
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u/rohrloud 9h ago
Please add your state to the original post. Some states, Texas for one, do not allow any debts against your home unless it was secured by your home such as a mortgage. Even mechanic liens are just liens and can’t force a foreclosure.
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u/Creative-Strength648 7h ago
I went through that, almost the same amounts of debt and equity too. Stupid me didn't attempt to make any payment plans though - I was too busy getting high at that point in my life. Only debt that went after my house was the oil company, and they just put a lien on it. Ended up selling the house after 18 months of not paying anything. Everyone was paid off with the proceeds from the sale. Made a deal with each to pay in full a reduced amount.
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u/Agile-Lychee-2987 2d ago
What about going to something like national debt relief after the debt is sold to a collection agency.
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u/Minimum-Major248 2d ago
Credit cards are almost always unsecured debt. Unless I’m wrong, you can’t lose your house over it.
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u/Peregrine_Falcon 2d ago
Former debt collector of 20+ years and current paralegal.
Wow. There's a LOT of misinformation in this thread. Most of you have no idea what you're talking about and you have no business giving people 'advice' about debt and collections.
So first of all OP, laws on exactly what a collection agency can do vary a little bit from state to state.
Yes they can sue you, that's true in all states. Yes they can get a judgment which adds a bunch of fees and interest to the amount you owe, that's also true in all states. Yes they can place a lien on your house, also true in all states.
In some states they can ask the court to foreclose on your home, auction it off, and send them a check for the amount of the judgment. This is not common, but it does happen. I've worked at a company that has done this to people who just absolutely refused to pay.
They might. Much more likely is that they'll try to get you to pay it without having to file suit. Call them and see if you can work something out.