What Is a Lien?

By Kristi Waterworth – Updated Jan 1, 2025 at 10:59 AM EST

Key Points

Liens secure loans by allowing creditors to claim or sell property if debts are unpaid.
Common lien types include bank, judgment, mechanic's, real estate, and tax liens.
To mitigate lien risks, negotiate payment terms or fulfill debts to release the lien.
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If you buy things with loans and fail to pay for something important, you may end up with a lien. But just what is a lien, and how do they happen? Read on to better understand this tool some creditors use to collect a debt.

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Two people talking and reading paperwork at desk with legal books and gavel. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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