Free Consultation

Lien on the house because of unpaid student loan

My husband is currently unemployed. He hasn`t been able to repay his student loan for quite some time. He stopped attending school over 7yr ago.The collection agency has taken over now and keeps on calling him saying, they`ll put a lien on the house if he doesn`t sell the house to repay his loan. The house is under both; but I actually am the one who put the down payment to get the house and always making the mortgage payments. I haven`t missed a payment and not planning on doing so. I have a steady full time job and support our family of 5. However, I cannot help out my husband with the payments to his loan. I worked so hard to get this house and now to think that a lien can be put on it, makes me very angry and desperate. Can they actually put a lien on the house? I`ve been told I cannot remove my husband`s name from the title as I would have to refinance the house. I cannot refinance the house because my income is not enough to do so. I don`t know what else to do. My husband wants his name off the title to avoid the bank to put a lien on the house for he knows what this house means to me and our family. we don`t know what to do. He keeps on looking for josb with no luck still.

Posted from: Alberta

One Response to “Lien on the house because of unpaid student loan”

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

Hello, putting a lien on property is a normal mechanism for an unsecured creditor to force collection of a debt. It protects the loan and then when the house is sold or re-financed it all but guarantees the creditor will be paid.

In this case you can’t simply remove your husband from title of the house just to protect the property from a genuine debt. If your husband is on the house, has been since inception then he has a beneficial interest in the property and you cannot prevent a creditor from registering on title.

The only choices are this:

1. Negotiate payment terms with the creditor;
2. Obtain financing to pay out the student loans and then make payments on the new loan;
3. Have your husband file for court protection through either a bankruptcy, a consumer proposal, or through orderly payment of debts.