Lien

A lien is a legal claim or right against an asset that is used as collateral to satisfy a debt. It grants the lienholder, often a creditor or lender, the authority to seize or sell the asset if the debtor fails to fulfill their financial obligations. Common types of liens include mortgage liens on real estate, mechanic’s liens for unpaid construction work, and tax liens imposed by governments for unpaid taxes. Liens ensure that creditors can recover funds owed, but they also burden the asset, thus potentially complicating its sale or transfer until the debt is resolved.