Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Thanks for the clarification; I am asking if the economy worsens can this creditor take my home and pension if I can't pay? Response: If you default, the creditor may come after the house but not the pension. Your pension and retirement benefits are exempt from execution pursuant to TCA Sections 26-2-105 and 26-2-111. As for the house, if you have a mortgage on the property and the house is currently under water (worth less than the mortgage securing it), your LOC would most likely result in the creditor sending your account to collections and subsequently to a law firm to file a lawsuit to recover the debt. If the creditor prevails, a lien may be put on your house but the creditor will not be able to force the sale since there will be nothing in there for the creditor after the sale--the proceeds will go to satisfy any mortgage you have on the property, then your homestead, then the creditor. There would not be any incentive for the creditor to foreclose when your property is already worth less than the first mortgage securing it.