Homeowners in California have the right to declare their primary residence a homestead. Claiming homestead status protects your equity from creditors in the event of a lawsuit or a bankruptcy. While you can get some homestead protections automatically, the most valuable ones require action on your part.
The short answer is no, a debt collector cannot take your house. However, a creditor whose loan is secured by your house can foreclose on the loan and take the house, and depending on your state laws, a debt collector without a security interest in your home may be able to put a lien on it.
All states have designated certain types of property as "exempt," or free from seizure, by judgment creditors. For example, clothing, basic household furnishings, your house, and your car are commonly exempt, as long as they're not worth too much.
When your creditor has a court order against you, they can apply for another court order that secures the debt against your home or other property you own. ... After your creditor gets a charging order, they can usually apply to the court for another order to force you to sell your home. This is called an 'order for sale'.
You can lose a lot in a lawsuit, including your home, car and life savings. If you lose in court, you'll have to disclose all of your assets, and you might lose money and property if you aren't careful. Insurance can protect you, but it has to be the right insurance.
Kansas, Florida, Iowa, and Texas provide an unlimited dollar value homestead exemption. Florida and Texas, in fact, are well known as debtor-friendly states because of their homestead exemptions. However, homesteads acquired through fraud can no longer be protected.
Certain assets are exempt from creditor claims and from lawsuit judgments. They cannot be touched, and you will not lose them. Some exempt assets include ERISA qualified retirement plans (think 401(k) or pension plans) and homesteaded property.
Asset protection trusts offer a way to transfer a portion of your assets into a trust run by an independent trustee. The trust's assets will be out of the reach of most creditors, and you can receive occasional distributions. These trusts may even allow you to shield the assets for your children.
A forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder's office; a misapplied tax payment — these are but a few of the hidden "title defects" that could cause you to lose your property.
Basically, a homestead exemption allows a homeowner to protect the value of her principal residence from creditors and property taxes. A homestead exemption also protects a surviving spouse when the other homeowner spouse dies.
You can sue someone even if they have no money. The lawsuit does not rely on whether you can pay but on whether you owe a certain debt amount to that plaintiff. Even with no money, the court can decide that the creditor has won the lawsuit, and the opposite party still owes that sum of money.
The lawsuit is not based on whether you can pay—it is based on whether you owe the specific debt amount to that particular plaintiff. Even if you have no money, the court can decide: the creditor has won the lawsuit, and, you still owe that sum of money to that person or company.
If a debt collector shows up at your house, you don't have to open the door to them or let them in. If you ask them to leave, they have to go, and they can't take anything from your home either. If you talk to the debt collector, they need to show you ID if you ask.
When you leave a secured creditor unpaid, that creditor has the right to seize the asset you used as collateral when you incurred the debt. ... Unsecured creditors do not have the automatic right to seize and sell your home.
Even in states like California, which prohibits creditors explicitly from placing liens on joint tenancy property, spouses are not covered. Common law states mandate that the spouse equally owns any property obtained during the marriage. The exception to this rule is inherited or gifted assets.
A creditor can merely review your past checks or bank drafts to obtain the name of your bank and serve the garnishment order. If a creditor knows where you live, it may also call the banks in your area seeking information about you.
There are four ways to open a bank account that is protected from creditors: using an exempt bank account, using state laws that don't allow bank account garnishments, opening an offshore bank account, and maintaining an account with only exempt funds.