Yes. A person or company you owe money to can put a lien on a home that you own. But there may be something you can do about it. Maine law has some protections for homeowners in this situation.
When can a creditor put a lien on my house?
As a general rule, before a creditor can put a lien on your home, they must get a court judgment against you. A judge must decide that you actually owe the money and that the creditor has the right to try to collect it from you.
- One exception is that a contractor doing work on your house who you owe money to may put a “Mechanic’s Lien” on your home before taking you to court.
A creditor with a court judgment has many ways to collect the money. One way is to use wage withholdings or bank account garnishments. You can learn more about this kind of debt collection in our Guide To Debt Collection in Maine.
They can also put a lien on your house. Once the creditor gets a judgment, they may record a lien in the registry of deeds. Usually, this means that the creditor is claiming a right to a part of your home's value.
What does having a lien on my house mean?
You will have to pay the creditor if you sell your home, refinance, or get a new mortgage. But if the amount of value you have in the house is low, it may be protected against a judgment creditor.
What protections are there for Maine homeowners?
The value in your home that is more than what you owe on your mortgage is called your equity. So, if your home is worth $100,000 but you still owe $60,000 on your mortgage, you would have $40,000 in equity in your home.
Your equity in your home is protected from a creditor up to $80,000. This protected value goes up to $160,000 in certain situations. These include if:
- a minor dependent lives with you, or
- you are at least 60 years old or disabled, or
- you have a dependent who is at least 60 years old or disabled.
Note: If your creditor recorded the lien before October 18, 2021, then the protections for the equity in your house are $47,500, or $95,000 if you have one of the three situations above.
What can I do?
If a creditor put a lien on your home and the entire equity in your home is protected, you can demand that the creditor remove the lien. To do that, you can use this form: Request to Discharge Execution on Real Property.
Include evidence of the value of your property and any amount you owe on the property with the form. For example, you could include the town’s assessed value or a real estate broker’s opinion of value. You can also attach a bank mortgage statement.
Make a copy of the form and your evidence. Keep your copy in a safe place. Send the original to the person or company who put the lien on your house. To make sure you have a record that your letter was delivered, send it by certified mail, asking for "return receipt" and "restricted delivery."
The creditor has 15 days to remove the lien from the time they get the form. If they don't, you can ask a court to order the creditor to remove it. If you win, the creditor must pay your court costs and attorney's fees. You may want to call an attorney to help you and they could get paid by the creditor.
Removing a lien this way does not cancel the debt. You can learn more about how to get rid of debt in our bankruptcy guide.
July 2023
PTLA #025