Can a debt collector take my car or house?
Not on an ordinary unsecured debt like a credit card or medical bill, unless it first sues you and wins a court judgment. Even then, state law protects some property. A car loan or mortgage is different, because the lender holds a security interest in the car or house. A collector that threatens to seize property it has no right to take, or does not intend to take, violates the FDCPA.
"We will take your car." "Your house could be at risk." Collectors say these things because they work. Most of the time, on the debts collectors handle, they are not true, at least not yet, and not without a court.
Secured or unsecured: the first question
Unsecured debts are backed only by your promise to pay: credit cards, medical bills, personal loans, old phone bills. For these, a collector cannot take anything until it sues you and gets a judgment.
Secured debts give the lender a security interest in a specific item. A car loan is secured by the car; a mortgage by the house. Under the Uniform Commercial Code as adopted in New York, after default a secured party may take its collateral, through the courts or without judicial process if it proceeds "without breach of the peace" (N.Y. U.C.C. § 9-609). A mortgage is enforced through foreclosure, which has its own rules.
The FDCPA draws the same line. A collector may not take or threaten to take nonjudicial action to dispossess or disable property if there is no present right to possession through an enforceable security interest, no present intention to take it, or the property is exempt (15 U.S.C. § 1692f(6)).
What a judgment lets a creditor do
If a creditor sues on an unsecured debt and wins, it has tools to collect. In New York they include:
- Bank restraints. A restraining notice freezes an account, subject to protected amounts and a 20-day exemption claim window (CPLR 5222, 5222-a). See bank account frozen by a judgment.
- Wage garnishment. An income execution is limited to the lesser of 10% of gross income or 25% of disposable earnings, and cannot take earnings below 30 times the minimum wage (CPLR 5231(b)).
- A lien on real property. A docketed money judgment is a lien on your real property in that county for ten years after the judgment-roll is filed (CPLR 5203(a)). A lien is not a sale, but it can surface when you sell or refinance.
New York judgments last. A money judgment is presumed paid only after 20 years (CPLR 211(b)). In New Jersey, a wage execution generally takes no more than 10% of gross pay, and you can ask the court for a reduction (N.J. Courts form CN 11471).
What state law protects
| State | Home | Car |
|---|---|---|
| Florida | A homestead is exempt from forced sale, up to one-half acre inside a municipality or 160 acres outside, with exceptions such as taxes and debts for buying or improving the home (Fla. Const. art. X, § 4) | A debtor's interest in one vehicle, up to $5,000 in value (Fla. Stat. § 222.25(1)) |
| New York | A set amount of home equity, by county tier: $102,400, $170,700 or $204,825 as of April 1, 2024 (CPLR 5206; DFS) | An exemption applies; confirm the current amount with a lawyer |
| New Jersey | Not covered here; talk to a lawyer about your property | |
New York adds special rules for medical debt: no property lien on a primary residence in a medical debt action brought by a hospital or health care professional (CPLR 5201(b)), and no income execution on those judgments (CPLR 5231(b)).
When the threat is the violation
A collector may not represent that nonpayment will result in seizure, garnishment, attachment or sale of property or wages unless that action is lawful and the collector intends to take it (15 U.S.C. § 1692e(4)), and may not threaten any action it cannot legally take or does not intend to take (§ 1692e(5)). "We are sending someone for your car" on a credit card debt, with no lawsuit filed, fits that pattern.
The FDCPA provides actual damages plus statutory damages of up to $1,000, and requires a collector found liable to pay the consumer's reasonable attorney's fees and costs; file within one year (§ 1692k). In New York, GBL 601 bars threatening action the creditor does not take in the usual course, and a deceptive practice can support a GBL 349 claim. Florida's FCCPA bars asserting a legal right known not to exist, against any person collecting a consumer debt (Fla. Stat. § 559.72(9)). See the New York, New Jersey and Florida pages and the guide to threats to sue.
If you have been sued, do not ignore the papers. A default judgment is what opens the door to garnishment and liens, and the answer deadline is short. See sued by a debt collector.
What to do this week
- Find out if the debt is secured. Read the original loan papers. Credit cards and medical bills are usually unsecured.
- Check for a lawsuit or judgment in your county's court records.
- Write down the exact words of any threat, with the date and caller. The call log keeps them in one place.
- Dispute in writing if you do not recognize the debt. The letter builder drafts it.
- Run the violation checker.
Sources: 15 U.S.C. §§ 1692e(4), (5), 1692f(6), 1692k; N.Y. U.C.C. § 9-609; N.Y. CPLR 211(b), 5201(b), 5203(a), 5222, 5231(b), 5206; N.Y. DFS, Amount Exempt from Judgments; Fla. Const. art. X, § 4; Fla. Stat. §§ 222.25, 559.72(9); N.J. Courts, CN 11471; N.Y. Gen. Bus. Law §§ 349, 601(7).
Common questions
The collector said they will take my car if I do not pay today. Can they?
If the debt is not a loan secured by that car, no, not without first suing and getting a judgment. Threatening seizure or sale of property that is not lawful or not intended is a violation of 15 U.S.C. section 1692e(4) and (5).
Can my car lender repossess without going to court?
Under the Uniform Commercial Code as adopted in New York, a secured party may take its collateral after default without judicial process if it does so without a breach of the peace. The rules on notices and what happens after repossession are detailed; talk to a lawyer.
Does a judgment mean they can take my house?
A judgment can become a lien on real property, but state homestead laws protect a primary residence to different degrees. Florida's Constitution protects a homestead from forced sale within acreage limits. New York protects a set dollar amount of home equity that depends on the county.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.