Possessory Lien

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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.







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