What does Lien Sale mean on a car or property?

The term lien (“lien”, in English) means “charge” and its application depends on the branch of law in which it is used, be it civil, commercial, fiscal, among others. Lien Sale are usually applied on an asset or property that belongs to a person.

What does lien sale or lien sale mean?

If we start from the idea that a lien is a legal claim on a good or asset. A Lien Sale or lien sale is the sale of the right to claim imputed to an asset (car, house, etc.) to satisfy, for example, an unpaid debt.

Usually, the Lien Sale are held as public auctions. Assets placed in escrow and subsequently foreclosed (if necessary) are typically real estate, automobiles, and other personal property.

Depending on the laws of a particular state, contractors, subcontractors, and vendors they can put a lien on a property they have worked on, pending payment for services rendered.

How does the sale of a lien (Lien Sale) work?

The purchase and sale of Tax Lien in default is becoming an increasingly popular form of investment, and is similar to purchasing a Certificate of Deposit (CD) long-term. However, unlike a CD, tax liens cannot be sold back to the taxing authority and must be held until returned. Purchased lien redemption is typically at a specified rate of return within a specified time frame

Key information:

  • The Lien Sale It is the sale of a right on an asset that was imposed in order to satisfy an unpaid debt.
  • notifications of Lien Sale they may be published online by the local oversight agency, as well as in local newspapers.
  • There are limits to the amounts of interest rates that a lien buyer can impose.

Lien Sale: a source of income

The process of selling unpaid liens on a property can cause the amount owed to increase even more. When the lien debt is sold, usually through a local government agency, If the buyer uses a lien service company, more fees and interest are added to the lien. This allows the buyer to see a return on their investment as the debtor must now pay the additional costs.

Although a debtor may have various types of debt outstanding, including taxes, there are exceptions that protect their property and other assets from being subject to a lien sale.

For example, disabled homeowners, senior citizens, and veterans may receive some type of exemption. Active duty military personnel may also be eligible for exemption from the sale of liens on their property. Each jurisdiction will have its own criteria, application process and time frame in which the responsible agency must be contacted..

Buying a house with a lien on it is not without its complications.

Bidding process for the sale of liens

There are upper limits of interest rates that are imposed on the purchaser of a lien. Interest rate limits are set at the government level and vary by state. The bidding process is of the auction type, in which the winner is the highest bidder. Because there is a cap on the maximum interest rate a winning bidder can charge, the amount the buyer pays for the lien is paramount.

Lien Sale Auction Example

For example, if the maximum interest rate that can be charged for a lien is 12%, it is important that you calculate very well the limit of money that you are willing to pay for the lien. The lower the amount of money you ultimately pay for the lien, the better.. Since this is speculative, as a buyer you will want to limit the risk of not getting paid on time.

Put more simply, paying a 2% premium for the ability to charge up to 12% interest is much better than paying a 9% premium.

special considerations

Owners of property subject to a lien sale can have their property removed from the sale. To do this, they must do payment procedures and bring the outstanding debt up to date.

There are special procedures for different types of Lien Sale or lien sales. For example, the auction of a vehicle of a certain value may be very different from the way in which the sale of liens on the contents of a local warehouse is handled if the owner does not pay his bills to the storage company on time.The notices of Lien Sale they may be published online by the local oversight agency as well as in local newspapers.

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