Some residents of Chicago may be interested in learning more about unsecured debt collection. Although many people know that secured creditors can seize assets, it can also be possible in some circumstances for unsecured creditors to do the same.
Although an unsecured creditor does not innately have the option of seizing collateral to repay the debt, they can attain the right to do so through collection litigation. If an unsecured creditor is successful in a debt collection lawsuit, they may be able to employ various means of compelling repayment, such as levying bank accounts, garnishing salaries and attaching liens to real estate property. Such liens can result in significant hardship for the property owner.
A judgment lien placed on a property can prevent the owner from fully employing his or her rights as a homeowner. For instance, the lien can prevent someone from selling their home until the debt has been resolved to the creditor's satisfaction. Furthermore, a creditor with a lien can choose to file a writ of execution over the property in question. If a writ of execution is granted, it can allow the creditor to seize an asset and sell it as compensation toward the original debt. In this way, it is indeed possible for someone with unsecured debt to be put in a situation where they may lose their home.
If someone is worried about losing their home to certain collection practices, they may wish to secure legal representation to review their case. It may be possible to help someone find debt relief by negotiating some form of repayment plan or filing for bankruptcy. In some cases, filing bankruptcy can be the most effective way of quickly eliminating debt and may help prevent the foreclosure.
Source: SF Gate , " Can Unsecured Creditors Collect Their Debt from the Sale of My Home?", Ciele Edwards, December 12, 2014