Types of Debt that be a threat to a homeowners Equity
Its not just credit card debt that can be an issue, home equity loan's or line's of credit allows you to borrow money, using your home's equity as collateral.
There are two types of home equity debt: home equity loans and home equity lines of credit, also known as HELOCs. Both are sometimes referred to as second mortgages, because they are secured by your property, just like the original, or primary, mortgage.
A judgment lien permits the lien holder to seize and sell property.
Each creditor's collection options vary depending on whether you owe a secured or unsecured debt. When you leave a secured creditor unpaid, that creditor has the right to seize the asset you used as collateral when you incurred the debt. Your mortgage loan, for example, is secured by your home. If you stop making house payments, your lender can foreclose on the property. Unsecured creditors do not have the automatic right to seize and sell your home. They can, however, earn this right by taking you to court.