If your home is in your spouse’s name, and you don’t live in a community property state, you shouldn’t be concerned about a lien from an old credit card debt. However, you still owe the debt, and you should exercise caution if you’re being pursued by a collection agency.
Dear Keeping Score,Back in the early 2000s my late wife and I had a business that failed and I was served papers for credit card debt which I didn’t answer because we lost everything and I knew I couldn’t pay it. I have not heard much about the debt, nothing on my credit report, but it has ballooned to $30,000.
Fast forward to 2019, and I remarried six years ago. My wife owns her own home and wants to sell it. My name is NOT on the title. Can the collection agency put a lien on the house? We are in South Carolina. Thanks for the feedback. – Tim
Calm down and put your wallet back in your pocket! There are a lot of scams and unscrupulous people out there who claim you owe money that you really don’t.
I’ve had people call me saying they were from the IRS and the FBI who demanded I send them money for bogus bills. I have even had pretend crypto-do-gooders call about repaying my student loans (of which I have none).
No, I don’t believe your wife needs to worry about a lien on her house from your old debt. South Carolina is not a community property state. Most states with community property laws have a Spanish colonial tie somewhere in their history. Instead, because of its British colonial roots, the Palmetto State’s laws are based more on English common law. Plus, there is the fact that you are not listed on the title to the home.
Be careful when dealing with debt collectors
Let’s start with your assertion that the alleged debt has ballooned to $30,000. Where did that information come from, since you say it is not listed on your credit report? Also, you mention a collection agency and you say you have not heard much about the debt.
If a collection agency has contacted you in regards to this debt and that is how you know it is now $30,000, you need to be careful not to do something that might restart the clock on the statute of limitations on debts in your state. There is a brisk secondary market for old or “stale” debt. Old debts can be resold for pennies on the dollar time and again and often there is little or no documentation for older debts.
The Fair Debt Collection Practices Act covers your situation. If a collector contacts you, ask them in writing to provide you with proof of the debt. If they cannot, tell them not to contact you again about this matter. Legally, they have to stop contacting you. They could pursue you in court, but read on to see why I don’t believe that will happen.
I am also wondering if, when your business failed and you “lost everything,” you filed for bankruptcy. If you did, then you would have erased the credit card debt. However, as I have said before, I am not a lawyer and cannot give legal advice. It just seems like something worth looking at in a “lose everything” scenario.
See related: 10 tips for dealing with debt collectors, collection
If a judgment was rendered against you, it won’t affect your credit
But let’s move on to the debt and some timing issues. You say your business failed in the early 2000s and that was when you were “served papers for the credit card debt.” If you truly did not do anything about it, then I think the chances are pretty good that you were taken to court and lost. If you don’t show up to defend yourself, the court has no choice but to find in the creditor’s favor. This is why it is never a good idea to ignore a court summons.
So, if you lost, a default judgment was rendered against you for the debt. If this is the case, the judgment would not show up on your credit reports. Civil judgments are no longer reported on your credit report by any of the three main reporting agencies.
In South Carolina, the courts allow 10 years to collect on the debt after the judgment is filed. But here we are in 2019, so more than 10 years have passed. Unlike in some other states, a judgment cannot be renewed in South Carolina. But there may be other factors in play here. Remember I said I am not a lawyer!
If there was no judgment, the debt should still fall off under South Carolina’s statute of limitations, which is three years. After that, the credit card debt became uncollectable in court. No matter what, the debt wouldn’t be reported by the credit bureaus for any more than seven years, which explains why it’s not on your credit report.
This also means it won’t have any impact on your credit scores. Your credit scores, both FICO and VantageScore, are based only on data in your credit report (unless you opt to give them access to your banking or utility data).
See related: If I pay off an old debt, will it damage my rejuvenated credit score?
You’re still on the hook for your debt
All of this being said, this does not mean you don’t still owe the debt. You do. It is just not collectible in a court of law. My only concern is not for a lien on the house but for a bank account levy if money shows up in an account in your name.
A South Carolina attorney can advise you for sure. Additionally, if you have an attorney, you can tell any collector who is trying to get you to make even a small payment (which will reset the statute of limitations clock) or beginning to harass you, to direct all communications to your lawyer.
No professional collector who can’t take you to court will spend their time or money trying to chase an attorney for a debt that is beyond the statute of limitations. So my strong suggestion is that you consult with a qualified attorney.
Having a $30,000 debt hanging over your head, even from years ago, is not a good place to be. It’s long past the time to put this old issue to bed. Continuing to ignore it won’t make it go away.
Remember to keep track of your score!