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How a lien helps you collect on a debt

On Behalf of | Oct 18, 2021 | Debt Collection |

Collecting on a past-due debt isn’t easy. People who don’t want to pay their debts may take extreme measures to avoid financial responsibility. They might quit a job after the court applies a garnishment to their wages. They might cancel their phone service and move so that creditors don’t know where to reach them with a legal summons or bills. 

You may need to take legal action when the borrower or debtor is unwilling to repay what they owe. Often, the only way to collect with what you deserve is to ask the courts for their help. Garnishing someone’s wages can be a way to make them pay you back, but that won’t work if they relatively low wages or start working an untaxed job under the table. 

Placing a lien on their property might be a good alternative to wage garnishment if the debtor has a major asset in their name. 

How does a lien help you with an unpaid debt?

When someone has money in the bank, a vehicle or real estate in their name, that asset may comprise the majority of their personal worth. You, as a creditor, can ask the courts to place a lien on that property. 

A lien effectively prohibits the owner of an asset from refinancing or transferring the asset without first addressing the debt attached to it. They won’t be able to sell their home or vehicle with a lien against it without first repaying you the full amount of the judgment. If you have to take someone to court to enforce a debt, a lien can be a powerful way to compel someone to repay what they owe you. 

Learning about the various debt collection options can help you get paid even if someone tries to avoid their responsibilities to you.