Lien

A lien is a legal right or interest in property that secures the payment of a debt. The creditor who holds the lien has the right to sell the property to satisfy the debt if the debtor defaults on the loan. Liens can be voluntary or involuntary. A voluntary lien is created when the debtor agrees to give the creditor a lien on their property. An involuntary lien is created by law, such as a tax lien or a mechanic's lien.

There are two main types of liens: specific liens and general liens. A specific lien is a lien on a particular piece of property. For example, a mortgage is a specific lien on a house. A general lien is a lien on all of the debtor's property, both real and personal. For example, a judgment lien is a general lien that attaches to all of the debtor's property, regardless of where it is located.

Lienholders have priority over other creditors when it comes to collecting on their debts. This means that if the debtor's property is sold, the lienholder will be paid first, before any other creditors. The priority of lienholders is determined by the date the lien was recorded. Liens that are recorded first have priority over liens that are recorded later.

Lienholders can enforce their liens by filing a lawsuit against the debtor. If the debtor is found liable, the court will order the debtor to pay the debt and to satisfy the lien. If the debtor does not pay the debt, the court may order the property to be sold. The proceeds from the sale will be used to pay the debt and to satisfy the lien.

Lienholders can also foreclose on the property. Foreclosure is the process of taking ownership of a property through a court order. Once the property is foreclosed on, the lienholder becomes the owner of the property.

Liens can be a valuable tool for creditors to secure payment of their debts. However, liens can also be a burden for debtors. If you have a lien on your property, it is important to understand your rights and obligations.