Lien

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Related to Lienholders: Retaining 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 ?
A broadly accepted nonbankruptcy proceeding includes one where a lienholder can be forced to accept a monetary satisfaction through the process of foreclosure.
In the private context, for example, this is true when a lienholder asserts that a competing lienholder's claim should be subordinated.
In this circumstance, managers might beef up earnings to maintain a particular ratio of assets to liabilities required by a lienholder. We also discovered internal auditors considered fraud to be even more probable if income surpassed expectations and managers had an earnings-based bonus plan.
7426 also allows junior lienholders to bring an action to enforce their interests in surplus proceeds realized from the sale of a taxpayer's property by the IRS.
In effect, the city's position is that federal remedies for lienholders who receive insufficient notice are inadequate, because they do not allow a lienholder to discharge the lien while retaining their right to bring suit.
1977) (finding that maritime lienholders can sue vessel owners in personam to collect what may not be recoverable through an in rem action).
Such costs may include the cost of informing old insurers and other parties (e.g., lienholders) of the change, the cost of closing on the new contract, psychic costs of breaking long-term relationships, and the cost of learning any new procedures for dealing with claims or service representatives.
The diversity of interests among lienholders and creditors was extremely wide and their behavior highly unpredictable.
According to Walter Challenger, Princeville's new CEO, the resort's first priority is to settle its debts with lienholders and creditors, and to remobilize the crews on the Sheraton Mirage Princeville and the resort's two golf courses.
was trying to determine if a strategy existed that could benefit shareholders and lienholders alike.
agreements between senior and junior lienholders--the junior lienholders
mechanics' lienholders after the Minnesota Supreme Court had ruled