What is a lien?

A lien is a legal concept that allows a person or entity to take possession of a debtor's property until a debt is paid off. It serves as a form of security for the creditor, ensuring that they will receive payment for the debt owed to them.

Types of liens

There are different types of liens that can have varying impacts on your financial obligations and assets:

• Voluntary lien: A lien that is willingly agreed upon by the debtor, such as a mortgage on a property.
• Involuntary lien: A lien that is imposed on the debtor without their consent, such as a tax lien or judgment lien.
• Real estate lien: A lien placed on a property to secure payment for services or debts related to the property.
• Personal property lien: A lien placed on personal property, such as a car or jewelry, to secure payment for a debt.

Financial impact

Liens can have a significant impact on your financial obligations and assets. They can affect your ability to sell or transfer ownership of property, as well as your credit score and financial reputation. It is crucial to address liens promptly to avoid further financial complications.