Creditors Collect Assets Owned By Incarcerated Debtors

Added December 18, 2008 by Ilyce R. Glink and Samuel J. Tamkin

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Summary: Can a creditor put a lien on your house or property if you're in jail? If a creditor is able to get a judgment against a debtor, the creditor can go after assets owned by the debtor: bank accounts, cars and real estate. Whether you're incarcerated does not matter, but most states have time limits for creditors to pursue judgments against debtors.

Q: Can a company put a lien on your house or property if you're incarcerated? My brother has been in jail for 10 years. He returned his car to the finance company and they in turn auctioned it off for 4,000 less than what he owed on it. Can they sue or take his house?

A: Whether a person is incarcerated or not isn't the issue. If a creditor is able to get a judgment against the person that owed them money, that creditor can try to satisfy that judgment anyway they can. One of those ways is to go after assets owned by the debtor: his bank accounts, cars and even real estate.

The simple answer to your question would be that your brother's house is at risk if the creditor has a valid judgment against your brother to force the home to be sold. In some circumstances, the home may be protected depending on how the title to the home is held and whether your brother's family lives in the home. But you'll need to talk to an attorney to go over these specific issues.

Most states have time limits for judgments. You should try to determine whether the creditor still has the right to pursue the judgment against your brother. Ten years is a long time. The creditor might have had to go back to court to keep the judgment against your brother active. If the creditor did not follow the proper procedures in keeping the judgment against your brother alive, the creditor may have lost its right to continue to go after your brother.

Published: Deb 18, 2008

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