Lien Sale

AAA

DEFINITION of 'Lien Sale'

The sale of the claim or "hold" placed on an asset to satisfy an unpaid debt. Typically, lien sales are conducted as public auctions and the lien is on real estate, automobiles and other personal property. Depending on a particular state's laws, contractors, subcontractors and suppliers may put a lien on a piece of property they have worked on pending payment for services rendered.

INVESTOPEDIA EXPLAINS 'Lien Sale'

Buying delinquent tax-liens at a sale is becoming an increasingly popular form of investing, and is similar to purchasing a long-term Certificate of Deposit (CD). However unlike a CD, tax-liens cannot be sold back to the taxing authority and must be held until they are repaid. Redemption of the purchased lien is typically at a given rate of return within a specified time frame.

RELATED TERMS
  1. Floating Lien

    A legal claim placed on a set of assets rather than on a single ...
  2. Property Lien

    A property lien is a legal claim on a tract of real estate granting ...
  3. Mechanic's Lien

    A guarantee of payment to builders, contracters and construction ...
  4. Lien

    The legal right of a creditor to sell the collateral property ...
  5. Tax Lien

    A legal claim by a government entity against a noncompliant taxpayer's ...
  6. Judgment Lien

    A court ruling that gives a creditor the right to take possession ...
RELATED FAQS
  1. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>
  2. What are the long-term effects of delinquent accounts?

    Delinquency occurs when borrowers fail to make payments on their loans. All loan borrowers should do their best to avoid ... Read Full Answer >>
  3. What is the difference between a possessory and a non-possessory lien?

  4. What are the differences between delinquency and default?

    Delinquency and default are loan terms that describe failure to make a required payment. A loan in delinquency occurs the ... Read Full Answer >>
  5. What is the difference between a lien and an encumbrance?

    A lien represents a monetary claim levied against property to secure payment of an obligation of the property owner, while ... Read Full Answer >>
  6. In which industries is Average Collection Period most important?

    The industries in which average collection period – the median amount of time necessary for a business to recover its receivables ... Read Full Answer >>
Related Articles
  1. Retirement

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  2. Home & Auto

    Attention Home Buyers! Why You Need A Lawyer

    Property transactions are complex and subject to specific state/local rules. A professional can simplify the process.
  3. Active Trading Fundamentals

    Matching Investing Risk Tolerance To Personality

    Understanding risk tolerance is crucial to the advisor/client relationship and any good investment policy statement.
  4. Economics

    How Does a Lien Work?

    A lien gives a creditor the legal right to seize and sell property, then use the proceeds to pay off a borrower’s debt.
  5. Economics

    Understanding Covenants

    A covenant is a term placed in a loan that requires the borrower to either maintain or refrain from certain business activities.
  6. Credit & Loans

    How To Increase Your Appeal To Prospective Lenders

    Making a business eligible for loans/credit cards at the best possible rates requires crafting an excellent credit profile through the smart use of credit.
  7. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
  8. Economics

    Venezuela Teeters On Edge As Oil Revenues Shrink

    Low oil prices have drastically revised the economic status quo -- dealing a destabilizing blow to oil-exporters like Venezuela due to falling oil revenue.
  9. Economics

    Does A Junk Rating Reflect Russia's Fundamentals?

    Moody’s, like other credit rating agencies, has downgraded Russia’s sovereign debt rating to non-investment grade, but does this reflect Russia's economy?
  10. Stock Analysis

    Find The Right Discount Rate Amid Post-2007 Risks

    OIS discounting has become part of standard valuation techniques, in a market in which there is more uncertainty and less proxies for the risk-free rate.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!