Each state’s laws determine what actions credit card companies can legally take when recovering unpaid debt. When a credit card company or collection agency sues a Missouri resident for overdue credit card payments, the resulting judgment gives it the right to make a claim against his home or other real estate he owns via a lien. Missouri’s joint property laws, however, limit the creditor’s ability to execute the judgment.
Missouri Judgment Liens
If you live in Missouri and lose a credit card debt lawsuit, the creditor’s judgment serves as an automatic lien against any real estate you own. While creditors can attach a lien to your home for unpaid credit card debt, Missouri law does not permit creditors to create a lien on any property other than real estate. Thus, you need not worry about losing your vehicle or other personal property, such as jewelry, over an unpaid credit card debt.
A Missouri judgment attaches only to property the debtor owns. If you share ownership of real estate with another individual, the judgment creditor can still attach a lien to the property, but the amount of the lien cannot exceed your stake in the property.
For example, if you share ownership of a home with your sibling and that home is worth $100,000, you each own a $50,000 stake in the home. Your creditor can attach a lien to the home, but the lien’s value cannot exceed $50,000.. A lien exceeding $50,000 would impede your sibling’s claim on the home.
Missouri law treats property ownership differently for married couples. According to Barbara Glesner Fines of the University of Missouri School of Law, Missouri recognizes “tenancy by entirety.” This means that real estate belonging to a married couple does not belong to either person, nor does either spouse have a 50 percent claim on the home. The home belongs to the marriage as a whole. This does not stop a credit card company from attaching a lien to your home if it has a judgment, but it does limit how the creditor can collect the judgment.
A creditor executes a judgment by seizing property. Missouri’s tenancy by entirety laws give both spouses 100 percent ownership of the home. In general, when a creditor executes its judgment against joint property, it seizes the property, sells is, and remits half of the sale proceeds to the innocent party because the innocent party owned 50 percent of the home. In Missouri, creditors cannot execute a judgment lien against married couples because both spouses legally own 100 percent of the home. The only exception to this rule occurs when the creditor has a judgment against both spouses. If both spouses owe the debt, neither is an innocent party and the creditor can seize their jointly owned real estate.
The Missouri State Code sets the enforcement period for judgments in Missouri at 10 years. Any liens a creditor has against your real estate will expire 10 years from the date the court entered the judgment against you. If you do not pay off the credit card debt during the 10-year period that the judgment is valid, the creditor can renew its judgment – and its lien – for a subsequent 10-year period.
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.