Lien


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Related to Lien: line, Construction lien

Lien

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

Lien

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.

lien

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.

Lien.

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.

lien

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 ?
Significantly, construction liens arising under the NJ Lien Law are only effective as of the date of the filing of the lien.
A typical lien subordination provision taken from the current draft of the Model Intercreditor Agreement (10) is as follows:
A Within 90 days of the last day the contractor provided labor, professional services, materials, or equipment, the contractor must file a claim of lien with the county auditor for the county in which the real property is situated.
Another example of differences in state laws is that in Ohio it has been held that there is no right to a mechanics' lien for demolition work, but in New York there is an express provision permitting mechanics' liens for demolition work.
In other words, when assigning the lien to an investor, municipalities would need to receive 100 percent of the value of the lien.
How a lien is perfected depends on whether the lien remains on title at the time of perfection.
The bank maintained, its repayment was permissible because it used the money to pay its properly recorded, secured loans, which were superior to plaintiff's claims pursuant to the Lien Law's statutory priority provisions.
6330(d)(1) to review a determination by Appeals to proceed by lien with any such unpaid tax liability.
But their former double-wide has dogged them ever since with tax liens, soiled credit and the destruction of their dream-home dream.
The IRS's failure to mention the lien on the certificate effectively destroyed the bank's interests.
Every county in Arizona sells the tax liens to real estate investors in the form of tax lien certificates.
Mechanics lien holders file against property owners of a project as protection against not getting paid by a general contractor or subcontractor.