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What is the meaning of a Lien Amount?
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What Is A Lien Amount
A lien amount refers to a lien registered against someone’s asset or property reflecting the amount owed by the person.
Typically, liens are registered against a person further to a judgment where a person is ordered to pay a certain amount to another.
The main objective of a lien is to provide creditors with a legal means to get paid if the debtor does not voluntarily pay off their debt.
If the creditor of the judgment does not voluntarily receive payment from the debtor, the creditor can register a lien against the person’s real estate property, investment accounts, bank accounts, or any other valuable asset.
When a lien is registered against a person’s property, the property is “frozen” or on “hold” until the lien amount is settled.
If the debtor pays off the creditor, then the lien will come off.
However, if the debtor does not pay, the creditor may realize the lien amount on the asset subject to the lien.
Keep reading as I will further break down the meaning of a lien amount and tell you how it works.
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How A Lien Amount Works
When someone owes money to another, the creditor has the right to file a lawsuit and obtain a judgment from the court condemning the debtor to pay off the debt.
When the debtor does not pay off the debt, the creditor can register a lien against the debtor’s assets using the court judgment.
The creditor will often target the debtor’s real estate property or bank accounts.
When a lien is registered against a person’s bank account, the bank will put the person’s account on hold.
At that point, the account holder will see a lien amount on his or her bank statement.
For the lien to come off, the account holder must either find a way to pay off the creditor in full or agree on how to pay off the lien amount.
Otherwise, the creditor will be able to collect the sums due in virtue of the judgment by having the bank remit the lien amount in full or periodically.
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Common Assets Subject To A Lien
The most common assets that are subject to a lien are real estate properties, automobiles, and bank accounts.
Typically, a person looking to purchase a new home may want to obtain a mortgage from the bank to finance his or her purchase.
The bank will lend money to the homebuyer provided a lien is registered against the property for an amount representing the borrowed sums.
Similarly, a person buying a car may obtain a car loan to purchase the vehicle.
When a bank or financing company provides a person with a car loan, they will register a lien against the car for an amount representing the car loan.
Typically, the assets that are most likely subject to a lien are those that have value, could be easily sold, or turned into cash.
For example, putting a lien on a bank account is ideal as the asset is already in the form of cash or highly liquid assets.
An automobile or real estate property is valuable, allowing a creditor to get paid.
Although it may take more time to sell, real estate or automobiles can be sold, allowing the cash proceeds to pay off the outstanding debt.
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Lien Amount Consequences
When a lien is registered against an asset, the asset in question will be “frozen” or put on “hold”.
In other words, the asset owner will no longer be able to transfer, sell, or assign the title to the asset to someone else.
For example, if a person notices a lien amount on their bank statement, it means that the amount in question has been blocked by the bank further to the registration of a lien.
The account holder will no longer have the ability to transfer the funds subject to the lien amount out of the account or perform any transaction using those funds.
The account holder must have the lien amount removed to be able to access the funds again.
Similarly, when a lien is registered against a real estate property, the title of the property cannot be transferred or conveyed until the lien is cleared.
A buyer will not purchase the property when it is subject to a lien as the title is unclear.
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How To Remove Lien Amounts
When a lien is registered against someone’s property, that property is blocked until the lien is removed.
A person with a lien amount registered on their property should first obtain all the information about the lien.
The person subject to the lien has the right to know who has registered the lien, for how much, who the creditor is, and how the lien can be removed.
In some exceptional cases, the lien may have been registered in error.
In that case, you’ll notify the party having registered the lien so they have it removed.
However, if the lien was legitimately registered, it may have been due to a mortgage default, loan default, back taxes owed to the government, court judgment, or other legal instruments.
In that case, you must contact the lien holder to see if you can find an arrangement allowing you to pay off the outstanding debt you may have.
However, if the creditor does not wish to reach an amicable resolution with you and you wish to challenge the lien, you must act immediately.
In that case, it’s best that you hire an attorney to contest the lien so you can free up your asset if you believe there are proper grounds to do so.
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Lien Amount FAQ
What is a lien amount?
A lien amount refers to an amount that is blocked by the bank or another institution further to a party registering a lien against that property.
For example, if you see a lien amount on your bank statement, it means that the bank has put a hold on that amount further to the registration of a lien.
The amount is blocked until the lien is removed.
How can I register a lien?
In many situations, a party is legally entitled to register a lien against another’s property.
A lender can register a lien against a property if the borrower fails to make mortgage payments.
A lender can register a lien against a vehicle if the car owner fails to pay the car loan.
The tax authorities can register a lien against your assets for unpaid back taxes.
A person can register a lien against your assets to collect sums awarded in a judgment.
As you can see, there must be a legal basis for someone to register a lien against your property.
What happens if you don’t pay the lien amount?
If you don’t pay the amount owed to the creditor, the creditor can seize the asset on which the lien amount has been registered.
The creditor may have the asset sold so that the cash proceeds can be used to pay off the lien amount.
In some cases, the creditor may take ownership of the seized property and discharge the lien.
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So there you have it folks!
What does a lien amount mean?
In a nutshell, a lien amount represents an amount for which a lien has been registered against someone’s property.
For instance, you may see a lien amount of $1,000 against someone’s bank account.
This means that the bank will block $1,000 in the person’s bank account until the lien is removed.
The lien can be removed if the person pays off the lien amount, finds an amicable resolution with the party registering the lien, or legally challenges the lien.
Now that you know what a lien amount refers to and how it works, good luck with your research!
I hope you enjoyed this article on Lien Amount! Be sure to check out more articles on my blog. Enjoy!
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