Lien

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Related to Lienor: Liens

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 ?
It will also incur legal fees that will be added to the debt; the greater the debt, the less money will be left for the mechanic's lienor (or judgment creditor or inferior lender).
As set forth in depth below, Part II lien laws typically give the lienor the upper hand in dealing with payment disputes, especially when the lienor still possesses the animal.
This Part considers whether courts do or should take a similar approach when the foreclosure purchaser is not the holder of the equity of redemption, but rather a junior lienor or the holder of some other junior interest.
This deposit may have to be increased if the lienor commences a foreclosure action.
In New York state, the completing surety often has to contend with two forms of adverse claimants to the monies being held by the owner--first, mechanic's lienors and, second, trust fund beneficiaries under New York's Lien Law.
Suit must be filed within six months from the time when the debt is contractually due and payable to the lienor.
Using this test for prejudice, by definition, there is no scenario in which the intervening lienor could receive the windfall of being elevated to first lien position so long as the priority of the subrogee is limited to the amount owed on the first mortgage.
20(2), which was changed in 1988 to effectively say that lien rights of any lienor may not be waived in advance of doing the work.
Bankruptcy Code [section] 546 and the Construction Lien Law: Is a Lienor Entitled to Maintain its Already Perfected Interest Post-Petition?
Thus, for example, a mechanics lien will have priority over a previously recorded mortgage to the extent that the lienor can prove that its work enhanced the value of the property.
In these situations, the lienor may not have lien rights on the owner's real property, but can assert its claim against the bond instead.
The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.