Nobody likes to place a lien on their home, vehicle, or other property, but it is sometimes essential in order to be paid. Learn all there is to know about the lien procedure right here.
If you’ve been unable to collect money from a debtor, even after hiring a debt collection agency or an attorney, you may be entitled to put a lien on your debtor’s real property. Of course, obtaining a lien may take time, and various states have varied regulations surrounding lien placement. A lien, on the other hand, provides genuine security and real reason for your debtor to pay his or her obligations since a lienee (the one who filed the lien) may have the right to take ownership of the property on which the lien was placed if the debt is not paid.
The ideal lien for most debt collection cases would be a Mechanic’s Lien or a Judgement Lien.
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The Mechanic’s Lien
The most prevalent sort of lien is what is known as a Mechanic’s Lien. Contractors, subcontractors, or construction businesses file construction liens, labor liens, or artisan’s liens. This sort of lien is used by anybody who works on or improves a property, including roofers, carpenters, plumbers, and others.
A contractor accepts a task to enhance a property and enters into a contract with the property owner. The work is then completed by the contractor. Yet, the property owner either pays a portion of the agreed-upon fee or does not pay at all. The contractor may now file a Mechanic’s Lien.
In general, this implies that the contractor files in the county where the work was performed. A bill for the finished work is included to the submission. The lien will be “answered” at this stage, and a court date may be established. If the lien is upheld by the court, the contractor now has a lien on the property, allowing him or her the right to take control of the renovated property if the debt is not paid within a set time limit.
Lien on a judgment
A Judgement Lien, like a mechanic’s lien, gives a creditor the authority to seize a debtor’s property. A judgement lien, unlike a Mechanic’s Lien, is not for any specific labor done. Instead, it is filed when a creditor has not been paid for reasons other than those covered by the definition of a mechanic’s lien.
Assume a guy signs a deal with a printing press for brochures. They are provided by the printing press, but the man does not pay. The printing press may file a lien for the cost of the debt with the state or county, and the court will judge on its authenticity, much like a mechanic’s lien. If the lien is approved, the creditor (in this example, the printing press) has the right to seize property worth the amount of the lien.
Keep in mind that the processes, regulations, and rules governing Mechanic’s and Judgement Liens vary by state and locale. To find out more, contact a local attorney or county clerk. It’s best to attempt to collect your debt personally or via a debt collector, but liens are a means to secure some type of reimbursement for the services you’re due.
