Definition
A legal claim on your property as security for a debt. It means that if you don’t pay, the lender could have a claim on your asset.
What to consider
- Check for any outstanding liens on your property.
- Work to resolve liens quickly to avoid complications when selling.
- Keep your records updated to reflect lien removals.
Real world scenarios
- Missing tax payments leads the IRS to place a lien on Jared’s home, giving them a legal claim until he settles the debt.
- While purchasing a foreclosed house, Mia checks for existing liens. Clearing them is crucial to avoid future property disputes.
- The bank holds a lien on Tasha’s car title until she finishes paying off her auto loan.
Related terms
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