Before we discuss the different types of liens, it is important to understand what a lien is.
A lien is a charge against real or personal property for the satisfaction of some debt. It is the instrument by which a lender has a legal right to take your property if you default on the loan.
In the most simple terms, when you sign a mortgage, you promise to pay the agreed upon amount in a timely fashion.
If you do not, the lender has a lien against your property which gives them the right to take your property in lieu of payment. There are three main types of liens, described here.
A lien is a charge against real or personal property for the satisfaction of some debt. It is the instrument by which a lender has a legal right to take your property if you default on the loan.
In the most simple terms, when you sign a mortgage, you promise to pay the agreed upon amount in a timely fashion.
If you do not, the lender has a lien against your property which gives them the right to take your property in lieu of payment. There are three main types of liens, described here.
consensual liens
The term consensual means “with permission”, so these types of liens are voluntary.
You would knowingly enter into an agreement by which these types of liens are created. Here are some examples:
You would knowingly enter into an agreement by which these types of liens are created. Here are some examples:
statutory liens
The term statutory means “by the law”, so these types of liens are involuntary.
A statutory lien is created when creditors use legal means to obtain an interest in your property in lieu of payment.
These liens are created when you do not pay the debt you owe and you typically have an opportunity to do that first. Though you may not consent, you should be aware of these liens. Here are some examples:
A statutory lien is created when creditors use legal means to obtain an interest in your property in lieu of payment.
These liens are created when you do not pay the debt you owe and you typically have an opportunity to do that first. Though you may not consent, you should be aware of these liens. Here are some examples:
Judgement liens
The term judgement means “a ruling”. These types of liens are created as part of a judgement or settlement from a court proceeding.
Basically, anything that can land you in court can ultimately end in a judgement against your property.
Since a judgement lien is created at the discretion of the court, they can arise from a wide variety of complaints.
What is important to know is that a judgement lien requires court involvement, so again, though you might not consent, you should certainly be aware of such liens.
For example, if you are sued for any reason and the court finds against you and awards the plaintiff a monetary settlement, but you cannot pay it, a judgement lien may be placed against your property until or unless that judgement is paid.
Basically, anything that can land you in court can ultimately end in a judgement against your property.
Since a judgement lien is created at the discretion of the court, they can arise from a wide variety of complaints.
What is important to know is that a judgement lien requires court involvement, so again, though you might not consent, you should certainly be aware of such liens.
For example, if you are sued for any reason and the court finds against you and awards the plaintiff a monetary settlement, but you cannot pay it, a judgement lien may be placed against your property until or unless that judgement is paid.
