Unperfected Lien

Unperfected Lien

An invalid lien on the property of a borrower, usually resulting from a previous lien on the same property or simply poor record keeping. In a dispute or bankruptcy, a court normally treats unperfected liens as valid, provided there are no disputes from other parties.
References in periodicals archive ?
According to BB&T, the Subcontractors could not invoke Section 362(b)(3)'s stay exception because their unperfected lien rights in project proceeds were not an "interest in property" of CSS.
The court held the Subcontractors' "inchoate" unperfected lien rights that arose pre-petition were an "interest in property.
377) Delivery of an execution creates an unperfected lien against the taxpayer's personal property, but this execution lien would have been junior to all tax liens of the DTF.
The bankruptcy trustee used the "strong arm" powers of the Bankruptcy Code to unseat the creditor's unperfected lien.
According to Larry Highbloom, president of VINtek, 'The Dealer Monitoring Program reduces and prevents the accumulation of unperfected liens for auto finance lenders of all sizes.
This means that upon the bankruptcy filing, a debtor, or a creditors' committee (in Chapter 11), may act as a hypothetical judgment lien creditor with the ability to unseat prior, unperfected liens.