Definition of Possessory lien:
A possessory lien grants a creditor the right to remain in possession of a property under the lien until the debtor has satisfied his or her debt. A lien is the legal claim that one person has over the property of another as security for the payment of a debt. The property rests in the hands of, or is possessed by, the individual who grants the lien.
For example, if an individual buys something on credit, the item will not be in his or her possession until the debt to the creditor has been paid. This is different from most liens in the United States, where the lienee is granted possession of the property before the debt is satisfied, as is the case in a home mortgage.
Claim that is generally enforceable only if the lienor has the lienees goods or property in possession. Liens such as agents, artisans, bankers, and carriers, are examples of the possessory lien. However, unless it is a special lien, the lienor does not have an automatic right to sell the lienees goods or property and must follow the prescribed foreclosure-procedure. See also equitable lien.
How to use Possessory lien in a sentence?
- With most other forms of lien, the borrower gains possession even before the debt is fully repaid, for example with a home mortgage.
- When the debt is discharged, the lien is removed, and full legal possesorship passes to the borrower-owner.
- A possessory lien is when an item is purchased on credit or via a loan where the creditor has a legal claim on the item until the debt is satisfied.
Meaning of Possessory lien & Possessory lien Definition