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. Second Lien Debt

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

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

    The legal right of a creditor to sell the collateral property ...
Related Articles
  1. Should You Buy Property On Leased Land? ...
    Retirement

    Should You Buy Property On Leased Land? ...

  2. Understanding Your Mortgage
    Personal Finance

    Understanding Your Mortgage

  3. When (And When Not) To Refinance Your ...
    Home & Auto

    When (And When Not) To Refinance Your ...

  4. Green Mortgages Save Money And The Environment
    Options & Futures

    Green Mortgages Save Money And The Environment

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

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

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

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. 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 ...
Trading Center