Business Glossary

right of a party, typically a creditor, to hold, keep possession of, or control the property of another to satisfy a debt, duty, or liability. A mortgage would create such a security interest or lien upon property in the event of default.

creditor's claim against property. For example, a mortgage is a lien against a house; if the mortgage is not paid on time, the house can be seized to satisfy the lien. Similarly, a bond is a lien against a company's assets; if interest and principal are not paid when due, the assets may be seized to pay the bondholders. As soon as a debt is paid, the lien is removed. Liens may be granted by courts to satisfy judgments.

creditor's claim against property to secure repayment of a debt. A lien encumbers the borrower's property pledged as security, up to the amount of the debt, and guarantees the lender's right to collect payment through legal means. For example, a mortgage gives a lender the right to initiate foreclosure proceedings against a borrower in default on the mortgage loan. A lien holder has a prior claim than creditors whose claims are not secured by the borrower's assets.

action brought by a worker or creditor for failure to receive payment for labor and material provided. Property insurance is available for individuals with an insurable interest in property against which they may bring a lien.

charge against property making it security for the payment of a debt, judgment, mortgage, or taxes. It is a type of encumbrance . A specific lien is against certain property only. A general lien is against all the property owned by the debtor.

a charge against property making it security for the payment of a debt , judgment , mortgage , or taxes; it is a type of encumbrance . A specific lien is against certain property only. A general lien is against all of the property owned by the debtor.

Example: Abel failed to pay the contractor for work performed on his home. The contractor files a mechanic's lien against the property for the amount due.