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| Apr 25, 2017 | Uncategorized

Many people choose to put a lien on their debtor’s real property if they have been having trouble getting payment from a debtor. Liens can prove to be time consuming and there are various laws regarding their placement, but in some cases they may be the best option for you.

Consensual or Contractual, Statutory, and Judgment Liens

There are a couple of different types of liens that you should be aware of, such as those that are consensual or contractual, statutory, and judgmental. We will discuss the following in detail:

Consensual: Consensual liens occur when you voluntarily consent to them. An example of this is a residential mortgage, where a homebuyer gives consent to a bank to take a security interest in the home after a mortgage is secured. There are two types of consensual liens, known as Purchase-Money Security Interest Liens, where the creditor extends credit to the debtor for the purchase of property, or a Non-Purchase-Money Security Interest Lien, where the debtor puts up property that they had as collateral for a loan. In many cases, the creditor does not take or retain possession of the property, but the debtor will do this. Doctors lien, treating on a lien can be helpful for people who do not have health insurance, following an accident.

Statutory: Statutory liens arise by operation of law, when creditors will use one to satisfy a debt. These liens include mechanic’s liens and tax liens. In the case of mechanics liens, a contractor or mechanic performs work on property and will not be paid. In these liens, there is a security interest in the property. Having one of these liens could prevent a property being sold until the debt is satisfied. In the case of a tax lien, a lien will be placed against the property by local, state, or federal government. Hospital Lien Act allows a hospital that provides emergency and aftercare to place a lien on settlement or judgment if a patient recovers from a third party.

Judgment: These types of liens arise due to a lawsuit. The judgment lien is seen as “dangerous” because the court will grant a creditor an interest in the property after a court judgment. They can arise in very serious incidents, such as where you injure somebody in an accident and a judicial lien is placed against your property to pay for damages of the suing party. They tend to be very strict.

If you have questions about liens, we are there for you to answer every one of them. Liens can be complicated to understand, so call us today for more information.