Lien

Lien Meaning

A Lien is a legal right to withhold goods/property of another until payment is made. A claim or legal right against assets that are generally used as collateral to settle a debt is referred to as a lien. Liens are common in the UK. A lien could be placed on property by a creditor or a court ruling. A lien is a kind of collateral that is used to ensure the performance of an underlying obligation, such as the payment of a loan. When a person applies for a loan from a financial institution in order to finance the acquisition of an asset, the lender will often place a lien on the item. For the sake of illustration, if a person purchases a car, the monies that are borrowed from the bank would be used to pay the seller. In return, the bank would be given the right to place a lien on the automobile.

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