If you borrowed money from a creditor to make a purchase and are unable to repay the debt due to financial troubles, you may be at risk of losing your property if your creditor is a credit card company. Whether the credit card company can take your belongings for credit card debt in Pennsylvania depends on certain factors.
Ordinarily, a credit card company cannot take your Pennsylvania home and other belongings as payment for credit card debt. This is because credit card debt falls under the class of unsecured debt. Unsecured debt is debt without collateral. For example, if your property secures payment, this is a secured debt. If you have a home and a mortgage, your lender can secure payment for the debt if you miss payments on your mortgage. Likewise, if you have a car loan, the company that financed the car can secure payment if you do not make loan payments.
No Property Tied to Credit Card Debt
With secured debt, the creditor secures payment by threatening to take your property, prompting you to make payments, or by taking the property and selling it. Unsecured debt does not work this way. If you do not make payments on your credit card account, the credit card company cannot go into your wallet and take the credit card away. Even if the credit card company took the card or closed the account, the credit card company could not force you to pay the amount you have already charged on the credit card.
Although the credit card company is an unsecured creditor, the credit card company could seek judicial remedies against you in a Pennsylvania civil court. The credit card company could sue you and receive a judgment against you. If you do not pay the credit card company after a judgment, the credit card company can file a writ of execution to attempt to take your property.
Pennsylvania law grants you the right to exempt certain property from being used to pay creditors. The Pennsylvania Constitution lists the following property as exempt from execution: clothing, bibles, school books, military uniforms and paraphernalia, sewing machines, insurance, pensions, public benefits and wages. Pennsylvania does not have a homestead exemption, therefore your house may not be safe from execution.