Free Consultation

Lien on Home

Can you explain the repercussions of a lien being placed on ones home — the purpose of which is to collect on an unpaid credit card (Bank of Montreal/Mastercard)?

For example, does this mean that the owner is forced to leave and that the house is sold by a third party OR does a lien against the property entitle an unpaid lender to seize any available equity should the owner decide to sell?

Also, if an owner can indeed be forced from their home, are they entitled to any notice and once a lien has been placed on the home, is it too late to file for bankruptcy or attempt some sort of settlement with the bank?

Posted from: Ontario

One Response to “Lien on Home”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

A lien holder typically won’t be able to force the sale of a house. It typically stays on title until you have paid the credit card debt, you have to re-finance the property (i.e. renew a mortgage), or sell the property and at that point they will be paid out of any of the existing equity.

The rules surrounding liens are different in every province so it would be a good idea to contact a local trustee and together you can determine whether you are best to simply let the lien sit there or if the filing of a consumer proposal may be a better way to settle the debt and in turn allow the removal of the lien.