A lien is a claim against someone else’s property that provides security or collateral when one party lends money to another. If you’re paying for your car or home, you probably have a lien on your property. if you default on your car payments or mortgage loans, for example, the lender has rights to your car or home, so they can choose to repossess your vehicle, prevent you from selling your home, or otherwise use your property to repossess your investment.
Having a lien on your property is the opposite of having a “clean” title, so liens often get in the way when people try to sell their cars, loans, and other assets.
what are the different types of liens?
You can accept a lien on your property when you apply for a loan, usually to pay for a car or a house. liens can also be involuntary. If you owe a creditor, they may ask the courts to place a lien on your property to increase your chances of getting your money back.
Governments, financial institutions, and even small businesses can encumber your property. The most common types of liens include:
- bank lien – A lien the bank places against your property when you take out a loan to buy an asset (for example, a car loan).
- court liens : a lien that the courts place on your asset(s) as a result of a lawsuit (often sought by creditors)
- liens mechanics : a mechanic goes to court and asks for a lien against your car because you didn’t pay him for services rendered (construction workers and other professionals can also ask for a lien to guarantee payment)
- real estate liens – a lender has the legal right to seize and sell real property if a contract is broken (mortgage liens are a type of real estate lien)
- tax liens – the government can tax your property if you don’t pay taxes
See also: How Much Does It Cost to Lease a Car?
In some cases, creditors will use their rights to seize and sell your property and pay themselves. Most often, liens come to light when people try to sell their property. If you try to sell property with a lien on it, you must get the lienholder’s permission and use (at least part of) the proceeds to pay back your lender or lienholder.
how to get, or get rid of, a lien
If someone owes you money, you can file a lawsuit and ask the court for a lien. This is especially true if the debt is tied to a “real” asset, like a car. sometimes the court will grant liens on the debtor’s paycheck or bank account.
If you want to remove a lien on your property, the easiest solution is to pay off the attached debt. if you don’t have the money, you can try to negotiate with the creditors, and if the lien is wrong, you’ll need to contact the creditor.
In some situations, you may be able to get your liens released by filing for bankruptcy. when you file for bankruptcy, you will either sell some of your assets, pay off creditors as much as you can, and start over (chapter 7), or create a sustainable payment plan that allows you to pay off as much of your debt as possible in 3 to 5 years (chapter 13).
Do I have to go to court?
The amount of time (if any) you spend in court depends on the details of your situation. If you need to encumber someone else’s property, you’ll probably have to take your case to a judge to get the lien.
If you want to remove a lien, you can discharge your debt without going to court. however, you will have to go to bankruptcy court if you decide to file for bankruptcy.
no matter what you’re dealing with, busch, reed, jones & sleeping, pc can help. we have 150 years of combined experience and our team is up to date on all georgia lien laws.
We know what it takes to protect your business and your future, and we offer free consultations.
Call us at (770) 629-0154 or contact us online to get started with one today.