Possessory Lien

AAA

DEFINITION of 'Possessory Lien'

Property that is in the hands of, or is possessed by, the individual who grants the lien. A lien is the claim that one person has over the property of another as security for the payment of a debt. In a possessory lien, the creditor has a right to remain in possession of the property under the lien until the debtor has satisfied his or her debt.




INVESTOPEDIA EXPLAINS 'Possessory Lien'

For example, if an individual buys something on credit, the item will not be in his or her possession until the debt to the creditor has been paid. This is different from most liens in the United States, where the lienee is granted possession of the property before the debt is satisfied, as is the case in a home mortgage.


A lien does not constitute ownership; rather, it is a type of encumbrance. Liens are attached to the property and not to a person.







RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Floating Lien

    A legal claim placed on a set of assets rather than on a single ...
  3. Non-Possessory Lien

    The legal claim against an asset in order to secure payment of ...
  4. Lien

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

    Debts that are subordinate to the rights of other, more senior ...
  6. Blanket Lien

    A lien that gives the right to seize, in the event of nonpayment, ...
Related Articles
  1. Retirement

    Should You Buy Property On Leased Land?

    Find out what to consider before investing in a leased-land property.
  2. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  3. Home & Auto

    When (And When Not) To Refinance Your Mortgage

    There are both good and bad reasons to refinance. Learn more about both here.
  4. Options & Futures

    Green Mortgages Save Money And The Environment

    This emerging type of loan is not just for treehuggers. It rewards you for eco-friendly housing, in the form of cold, hard, cash.
  5. Credit & Loans

    Reverse Mortgages: How To Find A Good One

    Finding a reverse mortgage generally means using a lender that specializes in them. Here's how to find a reputable one.
  6. Stock Analysis

    How Are Interest Rates Affecting Annaly Cap Mgmt?

    Annaly Capital Management reported a net loss of $658 million thanks to the mortgage REIT's strategy of hedging its exposure to higher interest rates.
  7. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.
  8. Credit & Loans

    How To Become a Mortgage-Backed Securities Analyst

    Specializing in structured or derivative credit products like mortgage-backed securities requires education and prior experience in the mortgage field.
  9. Investing

    3 Major Risks For Annaly’s Investors

    Thanks to its double-digit dividend yield, Annaly Capital Management has long been a favorite among income-seeking investors.
  10. Investing

    Ready To Invest In Financial Leverage Funds?

    Whenever you invest in a leveraged financial fund or are thinking about doing so, it's important to know the risks that could weigh on its returns.

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center