Unperfected Lien

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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.
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References in periodicals archive ?
(438) The legislative history simply deepens the mystery, according to which the amendment "prevents the avoidance of unperfected liens against a bona fide purchaser, if the purchaser qualifies as such under section 6323 of the Internal Revenue Code or a similar provision under state or local law." H.R.
The programme is to help auto finance providers avoid potential losses due to title exceptions from the liens they fund through their network of dealers.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. With the assignment of the avoidance powers by the debtor or trustee, a creditors' committee may use the "strong arm" powers to unseat the creditor's alleged lien.