Types

• According to Santa Clara Law School, there are two types of debt: secured and unsecured. A secured debt involves a lien on property such as your house or your car: If you don't pay the debt, your creditor can take the property away. Unsecured debt has no claim on anything if you don't pay: Credit-card bills, payday loans and medical bills are all unsecured, for instance.
  
  

Process

• No matter how big your unsecured debt is, creditors can't take your property to pay it unless they go to court, Santa Clara Law School states. Your credit-card company must first file a lawsuit to obtain a money judgment against you -- a judge's ruling that you owe them a debt. Then the company can file to have the judgment executed -- transformed into a lien on your house.
  
  

Effects

• If the credit-card company puts a lien on your property, states the Nolo legal website, that doesn't mean you have to pay them. Unless they try to foreclose, the lien has no effect until you sell or refinance the property. Even then, it doesn't prevent you from selling; it's just that the lien would stay on the property, and few buyers want that. And because liens are paid off in order of seniority, a new mortgage lender-- whether from your refinancing or someone else buying -- would have to stand in line behind the credit-card company if foreclosure occurs. Most lenders won't write a loan in that situation.
  
  

Potential

• Once a credit-card company has a lien on your house, it can foreclose to get its money, but that's very unlikely, the Bills website states. Under the lien seniority rules, the company won't see any money until the mortgage lender is paid off in full, as well as any other liens that were filed before the company's. In most foreclosure sales, all the money goes to the mortgage lender and other liens are wiped out.
  
  

Endings

• Paying off the debt will wipe out a real estate lien, the Real Estate lawyers website states. So will time: State laws set a limit on how long a lien can remain and once the limit passes -- as long as 25 years, in some states -- the law removes the lien. If you file bankruptcy, the court won't discharge a mortgage lien, but you might be able to get rid of a judgment lien against you.