Liens

Legally speaking, a lien is a security hold on an item of property to ensure the payment of a debt owed by a borrower. A lien exists between the legal owner of an item, the lienor, who grants the lien to the lienee, the person from whom the owner borrowed money. Granting a lien is convenient for people who want to yield money for further property investment without having to sell their other properties.

An item that has a lien can be seized and sold by the lender if the borrower fails to follow the agreed terms of payment of debt. Also, an item that has a lien cannot be sold by the borrower to anyone unless the debt from the lender is already paid. It must be noted though that the lender does not own the item upon being granted with its lien. The lender only has a legal hold of it until such time that the borrower is cleared out of his liabilities.

Liens are classified into two, voluntary and involuntary. Voluntary liens are liens wherein both the borrower and lender agreed in all the policies written in a legal contract. Liens in this classification include mechanic's liens, property mortgages, chattel mortgages and car loans. Involuntary liens, on the other hand, are liens wherein the lender alone set the items that the borrower must grant liens on. Liens in this classification include weed liens, attorney's liens, judgment liens, maritime liens, and tax liens.