Legal Question in Credit and Debt Law in Ohio

Re: Threatened lien

A lien means that the $4000 debt will be attached to the house. In the future when ever you sell the house, that debt will be taken away and given to the creditor. However, while the lien is in effect, interest will continue to accrue - so if you sell the house in 10 years let's say, that $4000 debt could grow to $10,000 or $30,000 or more.

To avoid a lien you could do several things. You could try to negotiate with the creditor to pay less than the $4000 (let's say 80%, so $3200), but this usually means you have to pay the full amount at once, not in payments. Another option is to declare bankruptcy, either Chapter 13 (which means you will pay back the debt over 5 years [a $4000 debt over 5 years means about $100/month]) or a Chapter 7 (which means you don't pay anything back at all). Which chapter you could or should file depends on many factors. If it is something you are interested in learning more about you should seek a bankruptcy attorney.

I hope that helped. If you have any more questions on bankruptcy feel free to contact me.

Re: Threatened lien

First off, avoid bankruptcy at all costs. Second, assuming the debt is a credit card loan, it is considered "unsecured" and the bank can not just arbitrarily put a lien on your home. First, they need a judgment, meaning they would have to file suit, win the suit, get a judgment and then attach the judgment to your real estate. A reasonably long, drawn out process.

I would instruct them not to call you anymore and if they ever file suit against you, call a lawyer. At that time a lawyer can negotiate a settlement and/or ressolution.