Non-Possessory Lien

AAA

DEFINITION of 'Non-Possessory Lien'

The legal claim against an asset in order to secure payment of the debtor's obligation. In a non-possessory lien the lienor does not hold physical possession of the asset in question, only a legal right. For example, a creditor can place a non-possessory lien against a debtor's piece of real estate in order to recoup his/her loan amount once the property is sold.

INVESTOPEDIA EXPLAINS 'Non-Possessory Lien'

For example, pawn shops retain possession of an item that a customer uses as collateral for a short-term loan. The pawn store owner therefore retains a possessory lien; if the customer does not repay the loan according to the terms and conditions s/he agreed to, the store owner can take ownership of the item offered as collateral.

RELATED TERMS
  1. Possessory Lien

    Property that is in the hands of, or is possessed by, the individual ...
  2. Lien Sale

    The sale of the claim or "hold" placed on an asset to satisfy ...
  3. Mechanic's Lien

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

    A lien that gives the right to seize, in the event of nonpayment, ...
  5. Lien

    The legal right of a creditor to sell the collateral property ...
  6. Loan

    The act of giving money, property or other material goods to ...
Related Articles
  1. Holding Titles On Real Property
    Retirement

    Holding Titles On Real Property

  2. Matching Investing Risk Tolerance To ...
    Active Trading Fundamentals

    Matching Investing Risk Tolerance To ...

  3. IRS Asset Seizures: Could It Happen ...
    Taxes

    IRS Asset Seizures: Could It Happen ...

  4. How to Hire a Bankruptcy Lawyer
    Personal Finance

    How to Hire a Bankruptcy Lawyer

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center