What Is a Property Lien?

A property lien is a legal declaration on assets that permits the holder to acquire access to the property if liabilities are not paid. This type of lien is required to be filed and authorized by a state agency or county records department. It is then presented to the property holder with specific conditions notifying them that measures have been taken to repossess a portion of property.

Primary Property Lien Takeaways

This type of lien is a declaration, legally on assets that permits the holder to acquire admission to the property if liabilities are unpaid.
Property liens can be allowed for repossessing property like a vehicle, jet ski, or even a house should the owner default on mortgage payments.
Usually, these types of liens are the last step a creditor is going to take to collect an unpaid liability.

How Property Liens Work?

These liens can be utilized by creditors in a multitude of situations. A creditor is required to file and receive authorization for a property lien through a state agency or county records department. Each jurisdiction has their own regulations and rules overseeing property liens.

A property lien can be awarded for repossession of a real estate property, vehicles, jet ski’s, or equipment. A tax lien is able to also start a legal claim by the government to the property of a taxpayer in which might include financial institution accounts, vehicles, and real estate. A lien is usually the initial step a creditor is going to take to confiscate property. It presents an announcement to the debtor that measures are being brought about. Levy is also terminology related with a lien and is the real act of confiscating property. This could bring about a sheriff’s sale.

Creditors and Property Liens

This type of lien is usually the last step a creditor is going to take to collect an unpaid liability. The awarding of a property lien typically occurs following numerous attempts have been made to collect the liability through an external or proprietary liability collection agency. It can be an ideal way for debt collectors to collect what they are owed. It can also cause significant trouble for the borrower.

In the case of a real estate property, creditors might decide to acquire a first-order property lien following several missed payments have happened on a mortgage loan. A creditor has definite rights to the property in which is utilized as collateral towards the mortgage loan. Consequently, creditors can readily acquire a property lien on a mortgaged property in arears. These liens indicate that the creditor is looking to foreclose on the property. When a debtor is unable to pay, the creditor has total rights to the home when an initial lien has been awarded allowing priority for repossessing the real estate property for reselling for paying off the liability.