Can a Credit Card Company Debt Become a Mortgage?

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    • If your credit card account is seriously delinquent, for example if you have not made a payment in six months, your lender may decide to go to court and obtain a judgment against you. Credit card companies usually do this only if they believe you can afford to pay off your debt or you have a valuable asset, such as your home. A judgment hurts your credit score and provides your creditor with several ways to collect the debt.


    • With a judgment, your credit card company has the power to file a lien against your home. This makes it similar to a mortgage loan, which you usually take out to purchase your home. The lien gives your credit card company a claim on your property. However, this lien is usually lower in priority compared to your actual mortgage loan.

    Creditor's Rights

    • Your credit card company usually uses its lien to claim some of the proceeds from selling or refinancing your property. If the outstanding amount of your credit card debt is higher than the amount of equity you have in your home, the credit card company's lien may prevent you from selling or refinancing until you can pay off the debt. Your credit card company also has the right to foreclose on your property.

    Probability of Foreclosure

    • Although your credit card company can foreclose on your property, it is unlikely to do so, according to This is because its inferior lien means that it has to use the foreclosure sale proceeds to pay off any other lien holders, such as your mortgage lender, before getting anything. A foreclosure may also hurt your credit card company's business image if the media reports about a small credit card balance resulting in the loss of a home.

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