We like to think our home is where the heart is. However, that is not necessarily so, particularly when a lien has been placed on it, and you are the last to find out about it. In all fairness, a lien is placed to collect an overdue debt, but that doesn’t mean your own home needs be used as collateral. To bypass this situation, this post is going to review the various types of liens that can be placed on your property, and what you can do about them.
What Is a Lien?
A lien is a legal assertation, attached to your property, in which puts others on notice that you owe a creditor overdue debt. Prior to you being able to sell your property and give a clear title to your buyer, you need to pay off that lien.
What are the various types of liens on a house?
Voluntary Liens
Mortgages are prime examples of a voluntary lien. Here, the property owner—or debtor—voluntarily provides a financial institution—or creditor—a legal assertation to the property pending that mortgage has been repaid.
Involuntary Liens
Many creditors, on the other hand, can file liens toward your property without your approval. Known as an involuntary lien, and in a lot of cases existing due to an already existing law presents a creditor a lien on your property when you defaulted on a debt.
Judgment Liens
A creditor can also take you to court, win a judgment toward you and file the judgment through the county records department. Filing that judgment results in a lien on your home.
General Entities That Might Place a Lien On Your Home:
- Attorney fees
- Creditors
- Contractors
- The IRS
- Child support/alimony
- Real estate taxes
How Do Liens Impact Homeowners?
An outstanding lien can impact a homeowner in many ways, and none of them are favorable. You might lose your property should a sale be forced because of an outstanding lien. Additionally, your credit rating can take a significant hit because a mechanic’s liens and judgment liens are reportable to credit agencies, and factor into your repayment record.
How Do Liens Impact Sellers?
A lien placed towards your property could prevent you from selling the house. A buyer needs to be wary of a home that has an ‘obscure’ title, and no financial institution is going to present a mortgage to a property with lien put towards it.
How To Have a Lien Removed
One way to get a lien removed is to just pay off the debt. However, you can mediate with the lien holder for a decreased settlement and pay less than was initially owed. Nonetheless, make sure the creditor officially releases the lien from your property, and make sure to obtain a copy of the ‘release of lien’ for record keeping. There are several other ways to have a lien removed—eliminate the lien by filing for bankruptcy, hold off so the statute of limitations concludes, and, in specific cases, obtain a court order to have it removed.
Dar Liens Offers Lien Processing and Filing in Arizona
Dar Liens Offers Processing and Filing of the following types of Liens: Pre-Liens, Notices to Owner, Medical Liens, Construction Liens, Mechanics Liens, HOA Liens, 20 Day Preliminary Lien Notices, and more.
