DEFINITION of 'Prior Lien'

A lien that is recorded prior to any other claims. Prior liens must therefore be paid before any other claims in the event that the collateral that is pledged against the loan must be liquidated. Junior liens are subordinated to prior liens.

BREAKING DOWN 'Prior Lien'

A primary mortgage is an example of a prior lien. This mortgage will be paid off before any second or third mortgages, or lines of credit. A perfected security interest is also considered a prior lien.

RELATED TERMS
  1. Voluntary Lien

    A claim that one person has over the property of another as security ...
  2. Second Lien Debt

    Debts that are subordinate to the rights of other, more senior ...
  3. Federal Tax Lien

    A federally authorized lien against any and all assets of a taxpayer ...
  4. Silent Automatic Lien

    A lien that does not appear in any public record. This is a method ...
  5. Tax Lien Certificate

    A certificate of claim against property that has a lien placed ...
  6. Possessory Lien

    Property that is in the hands of, or is possessed by, the individual ...
Related Articles
  1. Taxes

    Investing in Property Tax Liens

    Investing in property tax liens can be a viable alternative for experienced investors who are familiar with the real estate market.
  2. Investing

    How Does a Lien Work?

    A lien gives a creditor the legal right to seize and sell property, then use the proceeds to pay off a borrower’s debt.
  3. Personal Finance

    How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
  4. Taxes

    IRS Asset Seizures: Could It Happen To You?

    If you can't pay your taxes, know that the IRS has many avenues for collecting what you owe.
  5. Financial Advisor

    Top Alternatives Assets for Capital Preservation

    At best, alternative investments can help preserve capital by avoiding correlation with stocks and by beating inflation. Here's a look at some options.
  6. Taxes

    Start Over With The IRS

    If you're struggling to pay back taxes, try a fresh start with the IRS. They really can help.
  7. Investing

    How To Profit From News About China

    Renowned currency analyst Kathy Lien notes that as the US heads into midterm elections, politicians often focus on China, and she thinks the Chinese yuan will be active this fall.
  8. Investing

    How To Profit From Yen Intervention

    Kathy Lien, director of currency research for GFT, discusses the recent intervention by the Bank of Japan to support the yen and how traders can potentially profit from it.
  9. Financial Advisor

    What The Heck Is Quantitative Easing?

    Kathy Lien discusses the much-debated quantitative easing (QE) policies of central banks and what impact Fed action specifically may have on the dollar over the next few months.
  10. Investing

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay.
RELATED FAQS
  1. What types of liens are seen as good and which are bad for my credit?

    Understand what a lien is and what types of liens are most common for individuals, and learn which types of liens are good ... Read Answer >>
  2. Does the IRS report to credit bureaus?

    Understand the relationship between the IRS and the various major credit bureaus. Learn how credit bureaus find out about ... Read Answer >>
Trading Center