Legal Question in Credit and Debt Law in California

Re: Unable to make my cc payment

Eventually, yes. However, the creditor would first have to sue you, obtain a judgment, then seek the court's approval to sell your house. In California, in order for the creditor to sell your home, it must first prove that the property has sufficient equity to: (i) pay off all existing liens and encumbrances; and (ii) overcome the homestead exemption. Under California law (as well as Federal law, but in different amounts), a minimum of $50,000 of the value of a person's home is exempt from execution (Cal. Code Civil Procedure section 704.730(a)(1). If you are over 65 or disabled, the amount goes up to $150,000 (Cal. Code of Civil Procedure section 704.730(a)(3). You are presumed to be disabled if you are receiving SSI.

As an example, if the house is worth $150,000, and you are either over 65 or disabled, the creditor could never sell the house because they could not overcome the homestead exemption. On the other hand, if the home is worth $350,000 and there are no liens or encumbrances, the creditor could sell the home, take the amount of the judgment (together with the costs of selling the home) then pay you your homestead exemption amount ($150,000) together with the excess (if any) of the sale price not used to pay its judgment and costs.