Can I Lose My House in a Lawsuit?

By Amanda Hoey
can i lose my house in a lawsuit

When a lawsuit is brought against you, it can feel overwhelming and stressful. You’ve worked hard for your assets and it can feel like suddenly it is all at risk, even your home. So what assets could be taken from you and how likely is it actually to happen? Are you wondering “Can I lose my house in a lawsuit?” Let’s take a closer look at the answer.

What Can You Lose in a Lawsuit?

When you are presented with a lawsuit and you lose the case, you are usually required to pay some sum of money determined by the court. If you find yourself unable to pay the amount required, there are several methods that can be used by the plaintiff to get paid. One method is to come after your assets. But what assets, besides a house, can you actually lose in a lawsuit?

Your Car

While your house is probably the biggest asset you own, your car is probably also high on the list. You may be wondering about your house but also, “can I lose my car in a lawsuit?” While each state varies on this, some will allow you to claim a certain amount of money in an automobile or other personal property as exempt from being seized to pay off a debt. For example, if you can claim an exemption of up to $1,500 of your car’s value, then your vehicle can’t be taken to pay off debt unless the car’s value, minus all debts for which the vehicle is collateral, is greater than $1,500. Talk to your lawyer to learn more about how this works and what options are available in your state.

Your Life Savings

When you lose a lawsuit, your savings accounts are usually fair game in collecting the owed debts. However, certain retirement accounts like a 401(k) and IRAs, are typically protected or partially protected from a liability lawsuit. If you’re concerned about losing savings due to a lawsuit, contact your lawyer and discuss all your options for protecting your accounts.

Personal Possessions

Some lawyers are thorough in their research and leave no stone unturned. They can ask for records of all your personal possessions and assets, including:

  • Checking and savings accounts
  • Partnership agreements 
  • Titles to all properties
  • Any other real estate, like timeshares 
  • Trusts 
  • Safety deposit vault contents 
  • All jewelry and art

While it may not be as likely to lose personal possessions as it is to lose your house in a lawsuit, it is possible. Consult with your lawyer to know what assets you have that could be at risk and how to protect them in the case of a lawsuit.

Your House 

So can you lose your house in a lawsuit? If you’ve lost a lawsuit against you, unfortunately, there is a possibility you could lose your house. However, it’s not a simple process. How it would typically work is a lien would be placed against the home and in order to sell the home in the future, you would have to pay off the lien. In some cases, the sale of your property can be forced in order for the other party to get paid. But how likely is this situation to happen?

When Would I lose My House in a Lawsuit?

Fortunately, while it is possible that you could lose your house in a lawsuit, lawyers are typically looking for insurance funds instead of personal assets. Forcing the sale of your house in a lawsuit is often not worth the time as the creditor would also have to pay off any previous liens, like the remaining mortgages.

However, according to legal experts, there are two certain scenarios where it is more likely to occur. They are:

  1. When the lawsuit is the result of a catastrophic injury. This would include amputation, blindness, lifelong disability, or death. This type of lawsuit against you would typically result in the lawyers looking very closely at all of your assets.
  2. When you have a lot of personal wealth but little insurance. If you have a lot of assets but not a lot of insurance to protect those assets, it’s more likely that a lawyer will make a solid effort to seize them to get paid. 

If you’re worried that you may be at risk to lose your house in a lawsuit, you should do everything you can to prepare yourself. Learn more about the popular ways people protect their homes from lawsuits and talk with your lawyer to figure out the best methods for you and your lifestyle.

The Bottom Line

Being on the losing end of a lawsuit is never a good place to be. However, it can happen to anyone and it’s crucial to be informed and ready in case the time ever comes so that you can get the best result possible. While the answer to “can I lose my house in a lawsuit” is technically yes, it may not always be the case and the likelihood varies based on where you live, the type of accident that occurred, how much money and assets you possess, and the type of protection you have in place. If you’ve found yourself in a tough spot and may have a lawsuit against you, talk to your lawyer about what assets you stand to lose and how you can protect them.

Key Takeaways

When a lawsuit is brought against you, it can feel overwhelming and stressful. You’ve worked hard for your assets and it can feel like suddenly it is all at risk, even your home. So what assets could be taken from you and how likely is it actually to happen? What happens to your home? Let’s take a closer look.


1. Can My IRA Be Taken in a Lawsuit?

2. How to Protect Your Assets From a Lawsuit or Creditors

3. What Exactly Can Be Taken From You In A Lawsuit?

4. Can a judgment creditor foreclose on my home?

Life Event
Amanda Hoey
Written by Amanda Hoey
Content Marketing Manager for EasyKnock, financial and real estate writer.

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.