Featured:
Allergies
Grilling Guide
eHow Now Blog

What Is a Non-Consensual Lien?

A lien is a claim on a person’s property by a debtor. The debtor takes this action to ensure he will be repaid what he is owed. Under a lien, when the property in question is sold a portion of the proceeds goes to the debtor to satisfy the debt. Most liens are either created by a contract or through law. Non-consensual liens are those created under law. The three basic types of non-consensual liens are tax, judicial and statutory. Generally, non-consensual liens arise when it is clear the debtor owes funds despite repeated attempts to collect.

  1. Tax Liens

    • A tax lien is an interest obtained by a local, state or the federal government to secure payment for overdue taxes. The process of obtaining a lean is initiated by the Internal Revenue Service, the state or a local taxing authority. While state and local procedures may vary, the IRS must notify the taxpayer that it is looking to secure a lien against her property. The taxpayer then has the opportunity to request a hearing to contest the tax debt or the lien itself. Generally, the IRS must formally demand payment of the debt and any accrued interest via a letter before filing for a lien.

    Judicial Liens

    • Judicial liens are instituted by state and local courts to secure the payment of financial awards granted to parties through a legal proceeding. Often, in civil cases when a decision is reached, the winning party will be granted some sort of financial benefit. If the debtor has the opportunity to pay the judicially mandated debt but fails to do so, a local court can apply a lien against the debtor’s property. When the court institutes this lien it will often issue a legal order to local law enforcement, empowering an officer to seize the relevant property and sell it and provide the lien holder with the proceeds.

    Statutory Liens

    • Many states allow for certain professions to automatically create liens to secure their compensation for work done on property. Generally the lien will be placed on the property the person who holds the lien worked on. A common example of a statutory lien is the mechanic’s lien. A function of state law, a mechanic’s lien allows a contractor to place a lien on the house or building he is helping to construct. A lien makes it difficult to sell a property and so must be cleared before the building owner disposes of it. Some states require the contractor to file the lien with the clerk of court in the county in which the debtor lives. Also, some states require that the cost of the work done or goods provided is within a specific price range before a lien can be applied.

    Considerations

    • If a lien has been taken out against you or you wish to impose a lien on someone who owes you money, consult with a licensed attorney to make sure your rights are protected and that the lien is valid under the appropriate laws. This article does not provide legal advice; it is for educational purposes only. Use of this article does not create any attorney-client relationship.

Related Searches:

References

Comments

Related Ads

thumbnail
Featured