is the broadest term for any sort of charge or encumbrance against an item of property
that secures the payment of a debt
or performance of some other obligation.
Liens can be consensual or non-consensual. Consensual liens are imposed by a contract between the creditor and the debtor. These liens include:
- security interests;
- chattel mortgages
Non-consensual liens typically arise by statute
or by the operation of the common law
. These liens give a creditor the right to impose a lien on an item of real property
or a chattel
by the existence of the relationship of creditor and debtor. These liens include:
- tax liens, imposed to secure payment of a tax;
- attorney's liens, against funds and documents to secure payment of fees;
- mechanic's liens, which secure payment for work done on property or land;
- judgment liens, imposed to secure payment of a judgment
- maritime liens, imposed on ships by the law of admiralty.
Liens are also "perfected" or "unperfected." Perfected liens are those liens for which a creditor has taken the steps required by law to give third parties notice of his interest in the property in which a lien is claimed. The fact that an item of property is in the hands of the creditor usually constitutes perfection. Where the property remains in the hands of the debtor, some further step must be taken, like recording a notice of the security interest with the appropriate office.
Perfecting a lien is an important part of the task of protecting the secured creditor's interest in the property. A perfected lien is valid, even against a trustee in bankruptcy; an unperfected lien is not.