Real Estate Community Forum

I was just informed that my mother has a lien on her house from not paying a bill. She says that I have nothing to worry about because she still owns the home and they can't collect money from her if she doesn't have any to give. Unfortunately, I'm not familiar with liens and how they work. Can someone here explain what does a lien mean? What happens if this lien is never paid? Is this something that I should worry about?

The judgment will have to be paid before the property can be refinanced or sold. You won't be able to find a lender or a title insurer that will put its money on the line for a property with a lien.

Liens can often be paid inside a refinance -- also, they can be paid with the sale proceeds when funding occurs.

State and Federal tax liens are the most important -- if they don't exist, not to worry. Someone is wanting to be paid someday, so they filed a lien. This isn't unusual when the money-due on a service rendered is in contention, and the parties cannot come to an agreement to settle a bill.

I think you should always try to work out your differences with someone who is threatening to put a lien on your home. Once someone places a lien on your property, there is no way to avoid paying the bill. Does anyone know if there is any interest that accumulates on a lien? What happens if you file for bankruptcy? Do these liens still exist?

Also is it possible to have a lien even though you don't own a home? The only reason I'm asking is because my friend owes money to a credit card company and income taxes and was informed a lien was placed in her name even though she has no property. Is this possible?

A judgment can be placed on a person at any time as long as the proper process legally took place. It does not matter if the person does not own property. The judgment follows the person around for 10 years and in some federal instances longer.

Having property just gives the creditor a better chance of collecting on the judgment at some time. In many instances there is interest attached to the judgment.

Good Luck