If you plan to sell your Illinois home for a profit so that you can pay off any outstanding debts you have incurred, you may want to think twice. While selling your home is not a bad idea, know that you may not be in control of the proceeds once your home does go off the market. This is because a creditor may have already claimed dibs on your property.
According to SF Gate, there are several ways through which a creditor may collect its dues from the sale of your home. One such way is by filing a lawsuit against you. The first step a creditor will usually take after exhausting all other collection methods is to file a lawsuit. If the judge rules in the creditor’s favor, he or she may grant the creditor a civil judgment that allows the creditor to levy your bank account, garnish your wages and attach a lien to your real estate. It is the lien of which you want to be wary.
When a creditor attaches a real estate lien onto one or more of your properties, it has the right to seize your property, sell it and apply the proceeds to your past due debt. This fact in and of itself should scare any homeowner into finding a way to either pay off the debt or pursue debt relief options. However, note that many creditors will avoid seizing property because of the financial risk doing so carries.
Though a creditor may hold a lien on your property and maintain the right to seize it, there is no guarantee that the creditor will see proceeds from the sale. If other creditors had previously filed liens against you, those creditors are first in line for payment. If your home carries senior liens, a creditor may very well waste its time and resources by seizing your property and selling it.
However, that does not mean you are out of the dark. A judgment lien prevents you from selling or transferring homeownership of your property without first paying off your debt. Judgment liens expire after seven years in Illinois. After the seven-year period, creditors then have the option to renew their liens for an additional seven-year period. If a creditor chooses to renew its lien, you are essentially trapped into your home until you pay off the debt.
The information in this post is for educational purposes only. It should not be construed as legal advice.