BiggerPockets

Generally not, but that depends on the nature of the lien, like a Lowe's credit card for materials. If that was the address used on the job description or as the registered address for the line of credit, then yes they can. Laws exist for filing wrongful liens, if the wife is not responsible and the property was not connected to the debt, contact the creditor and tell them to correct it. Bill

Credit card is considered personal debt in most states unless the debt was perfected using a judgment of some sort. A default judgment can be attached to assets and this is probably your situation.

First, you need to determine if the seller personally guaranteed the debt which will be easily determined by pulling a credit report. If it lists her as authorized user, then she did not guarantee the debt. If it has her listed as principal or guarantor then she is liable even if the husband solely used the card.

In a judgment situation, you will need to get a release from the creditor (Discover) in order to close. I have success with the argument that the creditor has no rights to the asset since the mortgage company has senior position and because it is a short sale, their judgment is worthless. Provide a copy of an approval letter, a mortgage statement evidencing their is no equity and offer some small amount to release the judgment or lien.

If the seller is not responsible for the debt, then you need to also argue this point to them asking them for a copy of the original credit card agreement signed by the wife. Sometimes these credit card applications were forged by the spouse, so although she may not have knowingly signed. Honestly, it is much more work to get the creditor to release the seller especially in a judgment becuase this would need to be done through the courts and is expensive.

Frankly, you do not have the time for this. I personally never attempt a short sale where there is a judgment filed because it is a lot of work. The truth of the matter is she could very well not be responsible, but it will take a lot of legwork on your part and no guarantee that it will work out.

If you really wanted this deal, you should require the seller to pull a personal credit report just to see if she is listed as a guarantor or not, then price in a small amount to the creditor to release the property from the jugment or lien. Responsible or not, I believe offering some money to the creditor is the best way to expedite the matter.

Good Luck!