Non-Possessory Lien

A A A

DEFINITION

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

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 who grants ...
  2. Lien Sale

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

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

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

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

    The act of giving money, property or other material goods to a another party ...
  7. Tax Lien

    A legal claim by a government entity against a noncompliant taxpayer's assets. ...
  8. Second Lien Debt

    Debts that are subordinate to the rights of other, more senior debts issued ...
  9. Retainer Fee

    An upfront cost incurred by an individual in order to ensure the services of ...
  10. United States V. The South-Eastern ...

    A United States Supreme Court case involving the federal antitrust statute and ...
Related Articles
  1. Matching Investing Risk Tolerance To ...
    Active Trading Fundamentals

    Matching Investing Risk Tolerance To ...

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

    IRS Asset Seizures: Could It Happen ...

  3. Holding Titles On Real Property
    Retirement

    Holding Titles On Real Property

  4. How The PATRIOT Act Affects You Today
    Investing News

    How The PATRIOT Act Affects You Today

  5. When, Why And How To File A Complaint ...
    Credit & Loans

    When, Why And How To File A Complaint ...

  6. Do You Dare Sue Your Broker?
    Investing Basics

    Do You Dare Sue Your Broker?

  7. What To Do When You're Left Out Of A ...
    Personal Finance

    What To Do When You're Left Out Of A ...

  8. Fighting Back Against Collection Lawsuits
    Credit & Loans

    Fighting Back Against Collection Lawsuits

  9. 5 Free Or Low-Cost Legal Services
    Savings

    5 Free Or Low-Cost Legal Services

  10. How quickly should my financial advisor ...
    Retirement

    How quickly should my financial advisor ...

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center