Can a lien be put on your home for unpaid personal loan you cannot pay because of job loss or making less money?

Answer 1

Yes. The person owed would need to file and win a lawsuit to receive a judgment against the debtor. The judgment could then be enforced as a lien against nonexempt property owned by the debtor or in some cases even that which is jointly owned. The court does not accept the inability to repay a debt due to illness, job loss, etc. as a valid defense. Some judges will order a plaintiff and defendant to try to reach a equitable agreement before a judgment is entered against the defendant.

== == == == By example, if the debt is owed ONLY by one spouse, and the real property is owned jointly by a husband and wife (or married couple under some state laws), look to your state law to see if a creditor is precluded from foreclosing on the lien obtained via judgment on the real property and personal property, as the property may be held as tenets by the entireties and thus protected from execution.

Further, upon sale of the real property, if the proceeds are held by a husband and wife, and the judgment is only against one spouse, check again with your state law to see if the proceeds are exempt. Further, as to your home, even if you are single or married, in a state like Florida, look to your state law, to see if your primary home is protected from lien foreclosure by homestead laws. The above may be complicated by and inapplicable if the loan was secured by a recorded note and mortgage which is validly applicable to the home. Because the state law implicated in your question is not identified and there are not enough facts laid out, what follows are GENERAL thoughts only. Your best course of action is to seek legal advice from a licensed attorney in your state if you are in the USA.

The above is a general only and is not provided as legal advice that anyone should rely upon for any purpose.

Best of luck to you.

Answer 2

Yes, if the creditor sues the debtor and is awarded a judgment, the judgment can be executed as a lien against real property owned by the debtor. The inability to pay ones debts, regardless of the reason is not a valid defense to avoid judgments.

Answer 3

No. If the loan is secured by a mortgage or deed of trust, then the lender can foreclose that mortgage or deed of trust. Otherwise, the lender will need to obtain a court judgment against the borrower, which will automatically place a lien against all real estate owned by the borrower.