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A security interest in one or more assets that lenders hold in exchange for secured debt financing.


The ability of a lender to sell the collateral if the borrower defaults on a loan. For example, if a loan is secured by one house, the bank or other lender has a lien on the house. It may foreclose and sell the house if the borrower does not make payments in a timely manner. A lien makes a loan less risky for the lender and may entitle the borrower to a lower interest rate or even a higher line of credit. See also: Secured Bond, Mortgage.


The legal right of a creditor to sell mortgaged assets when the debtor is unable or unwilling to meet requirements of a loan agreement. A lien makes a bondholder's claim more secure.


A lien exists when you owe money to a lender on a particular vehicle or other asset, such as real estate, that has been used as collateral on a loan.

An asset on which there's a lien can't be sold until the lienholder has been repaid. When you own an asset on which there's a lien, you risk having it repossessed if you default and don't make the required payments in full and on time.


A legally enforceable claim on the property of another as a result of a debt or obligation. It may be voluntary,such as a mortgage,or involuntary,such as a tax lien.It may be general,such as a judgment lien on all property within a county,or specific,such as a mortgage lien on the described property. One of the most important concepts in lien law is the priority among competing liens if property is insufficient to pay all claims or if the owner files for bankruptcy.The general rules are as follows (however,there may be local variations among the various states):

1. The first lien to be recorded is paid first, and so on in the order of recordation.

2. A statutory lien, such as a mechanics' and materialmen's lien, may be given artificial priority even though recorded after another lien.

3. Lien priority may be reshuffled if a debtor files for bankruptcy. The rules are too complex to examine here.

4. Lien-stripping takes place in bankruptcy when an asset is not worth as much as the accu- mulated liens placed upon it. Junior lienholders are stripped out and turned into unse- cured creditors. Even mortgage liens may be reduced in amount, if the real estate is not worth as much as the loan balance.

5. A landlord's statutory lien for unpaid rent can be avoided, or set aside, by a bankruptcy trustee, but a landlord's contractual lien cannot be avoided unless lien-stripping comes into play.

References in periodicals archive ?
Materialmen's liens are the creation of statute, so you should become intricately familiar with the materialmen's lien statute (RCW 60.
13, 2011 /PRNewswire-USNewswire/ -- The Department of Revenue today updated its online list of state tax liens, which details more than 53,000 state tax liens against individuals and businesses that owe more than $370 million in state taxes.
Among the criteria considered in rating bonds secured by tax liens are the following:
Even worse, the Rinnerts said, they never received the tax bills and notices of pending liens because the county mailed them to their former mobile-home address.
For hens, the CAP can be used (either before or after a lien notice is fried) to (1) challenge a refusal to withdraw the notice or to discharge or subordinate a lien or (2) prevent attachment of the lien, and (as was noted) it can be used by nominees and third parties holding taxpayer property.
Unlike McDermott who had a small lien, many homeowners who are delinquent on municipal taxes have also fallen behind on other payments, such as credit cards, and amassed a sizable amount of debt," Viscariello said.
The Lien Law only protects a broker who procures a signed lease for a term of more than three years for any or part of real property intended for non-residential purposes.
Following teachings of LeRoy Schweitzer, the arrested leader of the Freemen, Broderick has placed liens against people including a U.
Later investigations revealed he had left the state and sold the trucks to two parties that knew nothing of the liens.
9 million subordinate lien public project revolving fund (PPRF) revenue bonds, series 2007A.
The priority of these liens is decided by the order in which the financing statements are filed, with the statements filed earlier in time receiving priority over subsequently filed statements.
4) Finally, government tax liens attaching before the bankruptcy filing date generally survive any Chapter 7 or Chapter 13 bankruptcy discharge of taxes, penalties and interest.