Illinois Real Estate Practice Exam

What could happen if a hospital obtains a judgement against Jack for a debt?

1. Jack will need to declare bankruptcy

2. The hospital could foreclose on Jack's home

3. The hospital could seek a lien on Jack's home

4. Jack's credit score will not be affected

The correct answer is: The hospital could seek a lien on Jack's home

When a hospital obtains a judgment against Jack for a debt, one of the potential consequences is that the hospital could seek a lien on Jack's home. A lien is a legal right or interest that a creditor has in the debtor's property, granted until the debt obligation is satisfied. By placing a lien on the property, the hospital secures its interest and can ultimately claim the debt from the proceeds if Jack sells the property. This means that the hospital has a legal claim against the home, which can affect Jack's ability to sell or refinance the property until the lien is resolved. This option aligns with common practices regarding debt collection following a judgment. While bankruptcy is an option for Jack to address his debts, it is not the immediate consequence of a judgment, nor does it only apply in the case of hospital debts. Foreclosure is another possibility that typically relates to mortgage debts rather than general judgments for debts, making it less applicable in this context. Furthermore, a judgment against Jack is likely to impact his credit score negatively, which contradicts the notion that his credit score would remain unaffected.