Answer: In most cases, the answer is no. Unless you voluntarily grant the creditor a lien on your property, the collection agency must take you to court and get a judgment before it can put a lien in place.
If a collection agency threatened you with a lien, this may be a violation of the federal Fair Debt Collection Practices Act ("FDCPA"). The FDCPA prohibits abusive practices by debt collectors. Under Section 808 of the FDCPA, debt collectors cannot legally threaten to take your property if they do not legally have the right to do so.
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney' s fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector' s net worth, whichever is less.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.