Tips for Filing a Lien

By Shannon C , last updated July 19, 2011
Filing a lien against property or assets is one way to seek restitution for unpaid obligations. However, it is not an easy process and each municipality may handle the process slightly differently. The first order of business for anyone who needs to file a lien to collect what is owed should be to research how the lien must be filed in your local area. The best place to begin your research is with the county recorder's office in your local area, and they can provide you with the information about which forms to fill out, what the registration fees are if any, and typically how long the lien can be held for and how to renew it. Learn more tips about filing a lien and decide if this is the next right step for you in pursuing collection of what is owed.
What is a Lien

The simplest way to explain what a lien is is by saying that by law, an individual or organization who has not be paid for services rendered or otherwise received payment for what is owed has the legal right to make a claim against the assets of the individual or entity from which restitution is owed. Liens can be filed against homes, businesses, cars, and other assets. A lien is a powerful tool because the presence of the lien is the equivalent to putting a scarecrow in the corn field for lenders, buyers and investors should the debtor wish to transfer or sell the asset(s) bearing the lien hold.
How Liens are Handled

There are different ways that a lien can be handled. For some liens, filing the lien is simply legal recognition that a creditor has a legal claim to an asset. In other situations, filing the lien entitles the creditor to secure and retain the asset until the debt is made right. Which route to take will depend on what is called the asset's "productivity", which relates to whether use of the asset is required in order to facilitate the debtor's ability to make restitution. For instance, if a creditor wishes payment for remodeling services rendered, it may not make sense to possess the facility if that is the means through which the debtor can earn enough to repay the debt.
Types of Liens

There are two main types of liens - a general lien and a particular lien. With a general lien, the lien can remain in place until the debtor has satisfied all debts regardless of the means. WIth a particular lien, the lien is against a particular asset or set of assets, and will not affect other assets the debtor may hold. Which type of lien to file will depend on how comprehensive the claim is.
How to File a Lien

Filing a lien must be done with the local county recorder's office by filing out the correct form and, if required, paying the registration fee. The debtor must then be notified of the presence of a lien, after which generally they have a year to clear the lien or it must be renewed.
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