Filing a Lien on Co-signer for default

by David
(Houston Tx)

I live in Texas & own my home. In 2001, I signed on a loan with my grandson for a new mobile home. The mobile home was repossed in Sept 2006 & sold on January 2007 by the lendor. There was a balance remaining which has been turned over to a credit agency. They have just today (9/15) sent me a settlement letter for a reduced price but I must pay by 9/19. On the phone they told me that if i didn't pay the settlement or anything, they would file a lien on my own property. Can they file a lien on my property? What are my options?

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Nov 07, 2011
Filing a Lien on Co-signer for default

The balance still owed on the mobile home now that the home has been sold is referred to as a deficiency. You must be sued and lose the law suit before a lien can be put on any property you own to collect on that deficiency. Also, although I do not know if the collection agency that contacted you is a law firm or not (many law firms are in the business of collecting debts for clients) you should know that if it is not a law firm and threatening you with a lawsuit, then it has violated the federal Fair Debt Collection Practices Act, which says that a debt collection agency cannot make threats that it is unable to follow through on. Therefore, you may have grounds for legal action.

I realize that I am responding to you after the date by which were told you must pay the settlement amount. If you have not resolved your legal issue when you read this answer, you should know that if you decide to settle, the first settlement offer is usually not the amount that a creditor or a collector will actually accept. In other words, usually the consumer and the creditor or collector do some back and forth negotiating before they reach a final settlement amount. Also, never pay the agreed upon settlement amount without first getting all of the terms of the settlement in writing.

Assuming you are still trying to resolve the problem that you wrote about or that you have reason to believe that your legal rights may have been violated, I recommend that you consult with a consumer law attorney in your area who helps consumers with their debt collection problems. Your first meeting will be free. Go here to learn about low-cost and FREE help with debt collection questions including low cost/no cost legal help.

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