What is a Lien
Lien, the term is primarily associated with law. In the terms of law Lien is the form of security interest decided over a property or item to secure the payment of a debit or performance of several other obligations. A person who owns the property and grants lien is known as lienor and beneficiary of a lien is known as liene. However, in the United States, the term, lien primarily refers to a wide range of burdens and also includes several other forms of charges and mortgages. In the United States a non-possesory security interest is also characteristically known as lien.
Categories of Lien:
Generally, liens are of two types-
- Mechanics Lien (this is the most common type of lien)
- Federal tax liens
A mechanics lien is also known as construction lien. This type of lien involves in a deal when a property owner borrow money for labor or materials to improve the status of his property. One can take help of a lien for repairing his property and also for its maintenance, reconstruction etc. The process also involves landscaping of a property. Federal liens are placed on a property by the federal government to pay your amateur central taxes. The exact payment and the due amount will be notified by IRS or internal revenue services. If you fail to pay the entire debit amount within the 10 days mentioned in the notice, you are supposed to receive notice of a lien ( Federal Tax). A lien will also be filed against all your property including your personal business assets.
What is a Judgment Lien?
A judgment line is quite different from trust. Unlike trust holder judgment liens can’t foreclose on the property or the home, what a trust holder can do. Being a judgment lien one can ask the property owner to pay the debts but he or she can’t force the person. Judgment lien has to wait to get the payments until the home owners sell his or her property. However, judgment lien can get an interest amount from the homeowners as court provides them the authority to do so. This interest continues until the property owner sells his properties and the lien holder is compensated properly. As majority of people used to stay at their houses for a long time so with out this interest rate a lien would is supposed to lost more from this property.
Other types of liens:
Apart from the above-mentioned liens there are several other types of liens as well:
- A divorce lien- is involved in a property, which is owned by both the spouses. The lien ensures that if any one of the spouses sold the property the other will get equal share of revenue when the property is sold.
- A homeowner’s association lien- is placed on a property when a homeowner fails to pay compulsory dues to that particular association. In order to sell a home, which belongs to any homeowner association you must show all dues clear certificate to the person who is going to buy the property.
The moral of the story is liens play a vital role to save properties that one is not being able to maintain or to take care of properly.