In this episode of The Georgia Bankruptcy Podcast, we dive deep into a pressing question many Georgians face: Can credit card debt lead to losing your house in Georgia? With the rise in credit card use and debt, understanding the potential consequences is crucial. 

We'll explore how debt can impact homeownership, what protections exist, and strategies to safeguard your property. 

Whether you're struggling with debt or just planning for the future, this episode offers valuable insights and advice. Tune in to learn how to protect your most valuable asset.

Jeff Kelly: Can A Credit Card Company Take Away Your House In The State Of Georgia? And most people will tell you absolutely not. It's not possible. Is that true? What's the answer? Well, the real answer is it depends. That's the answer to all legal questions.

Jeff Kelly: Hello, this is Jeff Kelly. And in today's podcast, I want to talk about Can A Credit Card Company Take Away Your House In The State Of Georgia? And most people will tell you absolutely not. It's not possible. Is that true? What's the answer? Well, the real answer is it depends. That's the answer to all legal questions.

There's a lot of debt settlement companies out there will say, Oh, we're going to take care of this for you, don't worry. And then what they do is take your money for six months and you're going to get sued anyway, debt settlement companies can not protect you. That's how people get into a lot of trouble.

So how would it work? How do they get to the point where they're going after your house? Well, step one, they've got to sue you. Step two, they've got to get a judgment against you. If you don't respond, if you really do owe the money, nothing happens. Bam, they got a judgment, and I have seen people before who will say, Oh, credit cards can't touch me.

Now, if you really want to be mean and vindictive, you can take your FiFa, your writ of fiery facious, and you can show up at somebody's house with a sheriff and you can say take whatever they've got and you can confiscate it, and sell it off on the courthouse steps.

Again, I've never seen a credit card company do that ever in all my years of practice. I have seen relatives do that to other relatives. You know, when things really get down on a personal level, I have seen that kind of thing happen, or you know, it's been a long time since I've seen him do it, but credit unions used to do that when they would really put the kibosh hammer down on people they had loaned money to.

So, let's say a creditor does get a FiFa against you and they don't choose to go after personal property and they just let it sit. What happens? That FiFa is accruing interest. Every year that debt gets bigger and bigger. Will it expire after seven years? Yes, but they can renew it for another seven years, and when that seven years goes by, they can renew it for another seven years.

So every now and then I'll get a call from some client that will say, this debt's 12 years old, I know it's barred by the statute of limitations. It's not barred by the Georgia Statute of Limitations when they get a judgment and they continue to renew it. Okay, so, but, hypothetically, let's say we're collecting interest.

Georgia is a nonjudicial foreclosure state, which means that your mortgage company can advertise your house for four consecutive weeks before the foreclosure date, and then foreclosing you call it out in the courthouse steps without having to go through court.

Credit card companies wouldn't be able to do that, but I think what they could do, and again, this is kind of speculative on my part because, like I said, in 25 years of practice, I've never seen this one. Could they go to court and do a judicial foreclosure? I think they could in certain situations.

So that almost never happened. And that's why a lot of people who had second mortgages would just kind of thumb their noses at the second mortgage company and say, nanny, nanny, boo boo, you can't get me, cause I know you got to pay off the first mortgage before you can really foreclose. Well, then real estate values went through the roof and it's probably been about a year or so, but we had a guy collis just screaming mad because his second mortgage company did foreclose on him.

Could that happen on a credit card debt? I think it could. Again, very unlikely they would have to pay off the first mortgage. You know, is it possible that some enterprising person out there is gonna look and realize, hey, these credit card companies have all these five phase, they're not doing anything with, they're just kind of sitting there waiting for the house to be sold someday so that they would collect at that point.

Let me back up for a second, make sure I explain that. If a credit card company sues you and records a FiFa and you just sit and wait and you just pretend like it's not real and it doesn't exist, it's accruing interest every year and the day your house gets sold, it will get paid out of your equity, whatever's left over after they pay off the first mortgage and they pay the property taxes. Yeah, they can eat up your equity.

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Jeff Kelly: Okay, so back to the crazy hypothetical, you know, could some investor buy FiFa's up from the credit card companies and could they then start taking a good hard look at the property values and make a decision? Hey, I think I'm going to pay off the first mortgage. I'm in second position and I'm going to foreclose.

I think even in a market where we have, you know, big fat amounts of equity, I think it's too risky for most normal people, but Hey, if somebody is willing to roll the dice to take over a house and I have seen so many people have like 200, $300,000 in equity, you know, in those cases might be worth it.

So yeah, it is possible, I think for a house to have negative value, very unlikely if it's remotely livable in today's market, it's going to have a lot of value, but long story short, the moral of the story is don't let your credit card debt run away from you. Don't pretend that just because it's unsecured that it's never going to bite you because I promise it will bite and it will bite badly.

The other thing that they will do is get a FiFa and just let it sit and let it record it every year. It's just slowly going to eat away at your equity of your house. Don't do that, take care of the problem.

You know, every now and then I'll get somebody that has some huge exorbitant amount of equity and you know, for whatever reason we can't make a bankruptcy work, either they don't make enough money to pay it or the equity is just so ridiculously high, there's no way we can wipe out any of it.

Yeah, if somebody's caught in that situation, I say sell the house because if you've got 2 or $300,000 of equity, it's better to sell it now, pay off the debt and you've got money in your pocket than to just sit back and let the debt slowly build and slowly eat away at that equity. That's never a good option. So one way or the other, the problem needs to get taken care of.

Thanks again for tuning in, and if you have any questions that are not answered by my videos or my website, let me know, and I'll try to come up with some new content for you. Thank you so much. Have a good one.

Narrator: Thanks for joining us this week on the Bankruptcy Podcast. Make sure to visit our website, kellybankruptcy. com, where you can subscribe to the show in iTunes, Spotify, or via RSS. So you'll never miss a show. While you're at it, if you found value in this show, we'd appreciate a rating on iTunes. Or, if you'd simply tell a friend about the show, that would help us out too.