Lien Release: What Is It and How to Get One?
A lien release is an official document filled out and stored in public records to indicate that a lien was removed from a particular property. You are hand-tied when your property has a lien attached, and you can do nothing to it. Therefore, after paying a debt, you should ensure that the lien attached to your property is removed.
You can have your lien removed if you pay a debt fully though many times, you must involve a power of attorney as many organizations are reluctant to remove a lien from your property. Involving a lawyer lengthens the process and wastes your time and money. You can avoid all these frustrations by engaging the DoNotPay Remove- Lien product, an expert in removing liens.
Everything You Need to Know About Liens
A lien is a possession of a right to keep custody of another person's property until they settle a debt they owe. When you obtain a loan or a service such as repairing your car, you have a set repayment time to which you have to adhere. When you fail to pay your debt promptly, the creditor has the right to secure your property with a lien and sell it to settle your debt.
What Are the Different Types of Liens?
Essentially there are three different types of liens:
Here, a debtor consents to a lien either for securing a loan or advancement of credit service. This type of lien can be categorized into two, that is, purchase money interest lien and non-purchase security. An example of a purchase money lien is when you secure a mortgage from a bank to buy a product like a home or a vehicle. A lien is attached to that property such that when you fail to pay the mortgage on time, the bank will repossess the property.
On the other hand, a non-purchase consensual lien is when you attach a lien on a property you already own to secure a debt.
These liens are authorized through state or federal laws for delinquent payment. For instance, a statute might allow a lien to be attached to your property if you have defaulted to pay your state or federal taxes. Under statutory lien, the creditor can seize your property even without your consent since they have the right.
The creditor can obtain a title to a debtor property if they cannot clear the debt as agreed. Your property becomes subject to judicial sales; the proceeds rightfully go to the creditor to settle your debt.
Reasons Someone Might File a Lien Against Your Property
The common reasons why a party might place a lien against your property include:
|Non-payment of a loan||If you default a loan from a creditor like a bank, it can execute the lien on your property and possess it.|
|IRS lien||IRS attaches a lien on your property if you fail to honor your Federal Tax obligation. It is important to note that this lien cannot be removed even when you file bankruptcy.|
|Child support||Child support is a responsibility you can never evade. If you fail to pay your monthly obligation for an extended period, the court might be forced to place a lien on your property to make you pay.|
|Contractor lien||If a contractor offers service and you fail to pay for it, the mechanic might seek a court order to put a lien on your property and subsequently sell it to repay themselves.|
Does a Lien Hurt Your Credit Score?
Consensual liens do not adversely affect your credit score provided you have fulfilled the terms of your debt payment. Statutory and judgment liens significantly affect your credit score and your ability to obtain credit services in the future.
Can You Sell Your Property with a Lien on It?
You are not supposed to sell a property with a lien on it. However, if you sell or refinance it, the creditor has the right to be paid out of the transaction's proceeds.
How to Remove a Lien from Your Property by Yourself
Here are a few options:
- Clearing your debt. After settling your debt in full, you can proceed to file a release of lien form and have your lien removed by the creditor.
- Court order. It is an option in the case when a lien was obtained through fraud or bad faith. In this event, you can ask to file a lawsuit to have the lien removed from your property.
- File for Chapter seven bankruptcy. You can file a bankruptcy to stop harassment from an individual or organization to pay a debt. Note that this option only applies to other liens but not child support and IRS lien.
Though you might remove a lien on your own, it is a complex and drawn-out process considering the amount of energy you would use since some creditors are reluctant to remove it. Luckily, DoNotPay presents an unmatched solution to your lien woes less annoyingly.
How Do You Remove a Lien Using Donotpay?
DoNotPay helps release a lien in three simple steps:
- Search for remove my lien on DoNotPay.
- Start our Remove My Lien product.
- Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.
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