How To File A Lien

Jump to Section

Need help with a Lien?

Post Project Now

What is a Lien?

A lien is a legal claim against an asset, often a property or a vehicle. A lien is most commonly used as collateral for payment of a debt. With a lien , a lender has the security of knowing that if the borrower doesn’t follow through on satisfying a debt, the lender will have a legal claim to an asset.

Liens can be filed by an individual person or by an organization like a bank. The party who files the lien is called the lienholder. Liens can be filed by a creditor, or they can be ordered through legal action.

For more information on liens, check out this article.

Types of Liens

There are various types of liens that are used to secure different types of assets. Some common examples of liens include:

  • Mortgage
  • Auto loan
  • Judgement lien
  • Mechanic’s lien
  • Construction lien
  • Tax lien

The type of lien used will depend on the asset that is being used to satisfy an obligation.

Mortgage. Many people may not realize that a mortgage or a home loan is a type of lien. When you borrow money from a lender to purchase a home, the property is the collateral in the event you do not repay the loan.

In addition to paying a monthly payment to satisfy the loan, lenders may also include other stipulations that borrowers must fulfil to stay in possession of the property. Common stipulations include maintaining insurance on the property and using the property as a primary residence for a set number of years.

Auto Loan. Similar to a mortgage, an auto loan is also a type of lien. A lender will hold the title of the vehicle while the borrower makes payments. Once the loan is satisfied, the lender will transfer the title to the new owner. If the borrower fails to make the monthly payment, the car will be repossessed.

Judgement Lien. An individual or a business can be a creditor if they win a lawsuit against another party in what is called a judgement lien. If the amount of money awarded in the lawsuit cannot be collected, the creditor can put a lien against the losing party’s property.

Mechanic or Construction Lien. Mechanics liens and construction liens are commonly used by contractors. If a party does not pay the contractor for the work performed, the contractor can file a lien against the customer to ensure payment.

Tax Lien. Your local government or the IRS may collect unpaid taxes with liens. Taxing authorities may attach liens to both current and future assets. Tax authorities can also collect from bank accounts before other creditors can. In fact, the IRS usually has the right to collect before your other lenders. Bankruptcy doesn't always discharge unpaid taxes either.

How to File Lien?

Filing a lien is a serious legal move and should only be done after exhausting all other options to be paid. It is first recommended that you reach out to the party who owes money to attempt to set up a payment plan or another way to collect payment. Hiring a debt collection agency is another way to avoid the formal legal process of a lien.

If all attempts to be paid fail and filing a lien against the other party is the final option, you can follow these steps to file a lien.

Step 1: Preliminary Notice. Depending on your state laws, you may be required to notify the debtor that a lien will be filed if nonpayment persists. Some states have a form that must be filed to give notice that can usually be obtained from the clerk of courts. Other states may have time restraints to give notice. Many states require that preliminary notice of a lien must be given within 10 to 20 days of the date work began. It is common to inform parties from the outset that a lien will be filed in the event of non-payment.

Due to the variations in state laws, if you are unsure about whether you need to file a notice or how many days you must notify the debtor, you should consult with an experienced lien lawyer to guide you through the lien filing process.

Step 2: Review Deadlines. Each state imposes a deadline in which you must adhere to if you decide to file a lien. In some states, like Louisiana, you only have 60 days from the date the work was completed to file a lien. Other states provide debtors up to a year to file a lien which provides ample time to exhaust other collection methods.

Step 3: Research the Property. If you plan on filing a lien on a property, you will have to complete some research prior to filing. You will need to complete a title search to verify the actual owner and acquire a legal description of the property from the deed.

This process can cost a few hundred dollars and it is important to note that if there are other liens currently on the property, they will take priority over your lien which could prevent you from collecting on the debt.

Step 4: Draft a Lien. Once you have decided to file a lien and have completed the research necessary, it is time to draft the lien document. A lien is usually a short one-page document that includes the following information:

  • Creditor details
  • Debtor details
  • Property details

Many states provide forms that can easily be filled out, but some states require additional documents like affidavits to be filed with the lien. To ensure you have all documents necessary to file your lien in your state and that your lien document is complete, consult with a knowledgeable attorney first.

Step 5: File the Lien. Depending on your state, you will need to file the lien with either the property recorder’s office or the clerk of court. If you are filing a lien on a property, it must be filed in the county in which the property is located. Most jurisdictions charge a filing fee between $25 and $50.

Step 6: Notifying Parties. After filing the lien, you are often required to notify all parties included in the lien like the property owner and any other lien holders. Consult with a local lien lawyer if you unsure who you are required to notify.

Step 7: Enforcement. After the lien is filed, if the debt isn’t paid, you can enforce the lien by filing a foreclosure lawsuit against the property owner. This will force the property to be sold and the proceeds will go towards repayment of the debt.

Each state has laws regarding the amount of time you have to file a foreclosure lawsuit, but most states allow a year. If you don’t file a lawsuit before the end of the enforcement period, your lien is expired and no longer has value.

Filing a foreclosure lawsuit can be a very complicated and time sensitive process. It is recommended that you consult with an attorney to ensure that all deadlines are met, the lawsuit is filed properly, and you are compensated for the debt owed.

Meet some lawyers on our platform

Benjamin W.

18 projects on CC
View Profile

Forest H.

51 projects on CC
View Profile

Phocus L.

2 projects on CC
View Profile

Bruce B.

1 project on CC
View Profile

Who Can You File a Lien Against?

Liens are used across all industries for repayment of debts and can be filed against a variety of entities and assets including businesses, properties, and vehicles.

File Lien Against Business

If a business owes you money and refuses to pay their debt, you can file a lien on the assets of the business. Before you can file a lien against a business, you must first obtain a judgement against the business in court.

To get a judgement in court, you will have to file a claim in the proper court and provide evidence to prove that the business owes you money. If a judgement is entered in your favor, you can then file a lien against the business’s assets.

The lien should be recorded with the clerk of courts. If the lien is against a bank account, a copy of the documentation should be sent to the bank or broker that holds the account. For liens on vehicles, you can send the documentation to the local DMV.

Once the lien is in place, you have the legal right to seize and sell the business assets to satisfy your debt.

File Lien Against Property

A lien against a property, often called a mechanics lien, construction lien, or labor lien, is filed when a contractor performs work on a property and then is not paid. Those who file liens against properties often include roofers, carpenters, plumbers, and other service providers.

The lien must be filed in the county in which the work took place. Most counties require a copy of the unpaid bill to be filed along with the lien. After the lien is filed and answered, a court date will be set to determine if the contractor’s lien should be granted.

If the court rules in favor of the contractor, the lien is active, and the contractor has the right to take possession of the property if the debt isn’t repaid in a specific amount of time.

File Lien Against a Car

Similar to property, liens can also be filed against vehicles like cars, boats, or other recreational vehicles. To file a lien against a vehicle, you will need a judgement in your favor allowing you to file a lien on a debtor’s property.

After obtaining a judgement, it is best to use a local sheriff department to seize the vehicle. Often, you will have to check whether there is already a lien on the vehicle and any other lienholders must be notified before the vehicle goes to auction.

Who Can File a Lien?

Generally, anyone who is owed money can file a lien against the debtor’s property to collect a debt. Liens are most commonly used by contractors who aren’t paid for their services, but anyone who obtains a legal judgment against another party for money owed is entitled to file a lien.

Get Help with Filing a Lien

Do you have questions about how to file a lien and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from experienced business lawyers specializing in drafting and filing liens.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

ContractsCounsel verified
27 years practicing
Free Consultation

A commercial contracts lawyer with over 25 years of experience (both at large law firms and in-house as general counsel of a public company)

ContractsCounsel verified
8 years practicing
Free Consultation

Brittany advises startups and emerging and public companies at all stages of growth, with focuses on formation and corporate governance matters, securities, venture capital financings, M&A and other strategic transactions, commercial contracts and general corporate counseling. Brittany represents clients across a broad spectrum of industries, including technology, automotive, mobility, digital health, consumer products and manufacturing.

ContractsCounsel verified
General Counsel & CEO
13 years practicing
Free Consultation

Tech leader and General Counsel with 12 years of in-house experience.

ContractsCounsel verified
5 years practicing
Free Consultation

James Allen is a native of Birmingham, Alabama. Mr. Allen has a considerable amount of experience in the areas of domestic relations, criminal law, family law, and general civil litigation.

ContractsCounsel verified
6 years practicing
Free Consultation

I am available to advise on entity formation, contracts, and employment policies. I am also comfortable litigating business disputes including partnership disputes and employment cases. Prior to opening my current practice, I worked for several years in a small civil litigation practice focused on employment matters and civil litigation. I attended law school at the University of Colorado, and I went to the University of British Columbia for my undergraduate education.

ContractsCounsel verified
6 years practicing
Free Consultation

We are a boutique firm located in San Diego that handles civil litigation with a couple other areas of law.

ContractsCounsel verified
Legal Counsel
5 years practicing
Free Consultation

Liz is an experienced insurance professional, having worked with carriers and brokers for over 10 years. She can review or draft a variety of commercial agreements and is here to help your business. Specialties include: Master Service Agreements, business process outsourcing, marketing and partnership agreements, broker agreements, and NDAs.

ContractsCounsel verified
4 years practicing
Free Consultation

I have been a freelance attorney for several years and have many of my clients returning to me for continued work because of the quality I produce.

ContractsCounsel verified
37 years practicing
Free Consultation

20+ years working internationally in-house with BMS, Bayer, ImClone and Osteotech, plus another dozen running a boutique business law firm. Our contract experience runs the entire spectrum - M&A, Real Estate, Procurement, Entity and Formation, Licensing, Employment, Drug Development, Professional Services and SaaS.

ContractsCounsel verified
President, Concierge Legal
25 years practicing
Free Consultation

Ms. Leavens is a corporate attorney with 10 years of experience as the General Counsel, Chief Compliance Officer and Corporate Secretary of a Congressionally chartered, non-profit corporation, and more than 20 years of experience as an advisor to executive officers and boards of directors in for-profit and non-profit organizations. She has substantial experience within in-house legal departments managing cross-functional teams comprised of multiple business units and attorneys on large-scale mission critical projects, and within a global law firm as a manager of public and private, domestic and international, multi-party business transactions. She has unique experience implementing government-sponsored business initiatives. Ms. Leavens was honored in 2015 as one of Washington, D.C.’s Top Corporate Counsel by Bisnow and the Association of Corporate Counsel; nominated in 2014 for the Association of Corporate Counsel (WMACCA) Outstanding Chief Legal Officer Award; and the recipient in 2014 of WMACCA’s Community Service Award.

ContractsCounsel verified
Corporate Counsel
8 years practicing
Free Consultation

Most of my career has been as in-house counsel for technology companies. My responsibilities included managing all vendor/procurement contracts and compliance, customer/partner/reseller contracts and compliance, data security/privacy compliance and incident responses, HR/employment issues, and legal operations. I am very comfortable negotiating Commercial Contracts, Vendor Agreements, and Procurement Contracts for goods, services, and licensing, as well as addressing Employment & Labor, Intellectual Property, and Data Privacy issues and compliance. I specialized and have a certificate in IP in law school and continued to develop in that area as in-house counsel for Interactive Intelligence, Genesys, which are unified communication companies, and KAR Global in the automobile digital services lines of business.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call