Lien

A creditor's claim against property to secure payment of a debt or performance of an obligation (§ 101(37), Bankruptcy Code). Liens may arise voluntarily, such as a mortgage on real property, or may arise involuntarily by operation of law, such as a judgment lien (www.practicallaw.com/5-382-3568) or tax lien (www.practicallaw.com/7-382-3869). Liens may perfected (www.practicallaw.com/0-382-3684) or unperfected. A perfected lien (www.practicallaw.com/7-382-3685) gives a creditor a priority (www.practicallaw.com/1-382-3706) interest in the encumbered property against third-party creditors, and is generally obtained by taking steps under state law that give third-party creditors notice of the lien.

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