A credit card company can't place a property lien merely because a payment hasn't been received. Because credit card debt is unsecured, the issuer has to go through the legal system to attach the debt via a lien. However, if you haven't paid your account in months, you maintain a high balance and you haven't been willing to talk about the situation with your credit card issuer, it may decide to pursue legal action against you that allows it to place a lien on your property.
Take Threat Seriously
Once the credit card company sends you a notice threatening to take legal action to secure payment, you should take its action seriously. The Federal Trade Commission prohibits any company from bringing up the prospect of legal action unless that action is under serious consideration, as this violates the Fair Debt Collection Practices Act. Treat it as a warning and an opportunity to call the company to arrange payment or seek a settlement of your balance.
Filing the Complaint
For a credit card company to place a lien on your property, it first must win a judgment in court. To do that, the company files a complaint with the court in your state, stating why it is suing you and what it wants. In this case, the credit card company wants money, which may include the past-due balance on your account, interest and perhaps attorney fees and court costs. The company then must take reasonable measures to ensure you learn about the action. It typically hires a process server to personally deliver the summons and complaint.
Default Judgment Risk
Often, consumers ignore the summons from the credit card company and fail to respond. When this happens, the creditor can and usually will apply for a default judgment. Once it gets that, the creditor can request the court's permission to take escalated measures to ensure it gets paid. A lien on your real property, such as real estate, is one option. Liens on personal property are possible in some cases, but less common. This is partially due to state restrictions, and partially because the credit card company might not have sufficient information on the personal property you have. After the default judgment has been issued, you rarely have any right to appeal.
Once the lien is placed on your property, it impacts your financial situation several ways. It lowers your credit score significantly, which means you'll have a hard time getting any more loans or credit card accounts. It also limits your ability to sell or refinance your property. You have to have a clear title to perform those acts, which means you'll have to pay the lien off beforehand. Doing so removes the lien, but the damage on your credit report remains. It takes seven years for the lien to drop off your credit report entirely.