Unperfected Lien

DEFINITION of 'Unperfected Lien'

A lien for which the holder has not provided a valid claim. Unperfected liens leave lenders open to the possibility that other creditors can challenge for the collateral being used in the loan. These liens are usually honored in court when the dispute is only between the borrower and the lender, but often fail to weather challenges mounted by third parties.

BREAKING DOWN 'Unperfected Lien'

Liens can remain unperfected for many reasons. Lenders that neglect to record their statement of financing for a piece of property that attaches the lien have failed to perfect their lien. Failure of a lender to discover a previously filed lien also renders their lien unperfected.

RELATED TERMS
  1. Voluntary Lien

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

    Property that is in the hands of, or is possessed by, the individual ...
  3. Second Lien Debt

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

    A federally authorized lien against any and all assets of a taxpayer ...
  5. Tax Lien Certificate

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

    A legal claim placed on a home that makes selling the home, obtaining ...
Related Articles
  1. Investing Basics

    Investing In Property Tax Liens

    Property tax liens can be a viable investment alternative for experienced investors that are familiar with the real estate market.
  2. Economics

    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. Financial Advisors

    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.
  4. Forex

    Life Beyond the Major Currencies

    Renowned currency expert Kathy Lien looks at other world currencies and their nation's economies to demonstrate that there are opportunities in forex outside of the US dollar.
  5. Forex

    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.
  6. Retirement

    Retirement Planning for Entrepreneurs and Small Businesses

    If your business has receiveables, here's a smart way to leverage them to build up your retirement fund fast.
  7. Forex

    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.
  8. Home & Auto

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay.
  9. Credit & Loans

    What Is Collateral?

    Collateral is property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup ...
  10. Credit & Loans

    Can't Get A Bank Loan? Turn To Your Neighbor

    Peer-to-peer lending can be an inexpensive way to gain access to credit when banks are restricting lending -- but you need to understand the entire deal first before jumping in.
RELATED FAQS
  1. How can I invest in tax liens?

    Find out about the steps an investor must take to invest in tax liens, along with the potential benefits of doing so. Read Answer >>
  2. 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 >>
  3. How do I avoid a tax lien on my property?

    Find out the best way to prevent the government from placing a lien on your property, including the consequences of having ... Read Answer >>
  4. What is the difference between a possessory and a non-possessory lien?

    Gain a basic understanding of a possessory lien and a non-possessory lien, the key differences between the two structures ... Read Answer >>
  5. Can credit card creditors put a lien in house property?

  6. What real estate documents need to be recorded?

    Learn how recording documents on real estate transactions, such as deeds, mortgages, easements and taxes, help ensure proper ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center