A claim against someone’s property. A lien is instituted to secure payment from the property owner if the property is sold. A mortgage is a common lien.
A creditor’s security interest or legal right in one’s personal property. In most cases, a lien remains in place until the debt owed to the creditor is fully paid off. Unpaid obligations allow creditors to seize property that has been pledged as security against those obligations.
Liens can be voluntary or consensual, for example, a lien on real estate in exchange for a loan. Involuntary or statutory liens, on the other hand, occur in which a creditor initiates legal action for nonpayment. As a result, liens are put on assets such as real estate and bank accounts.
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