How Liens Occur

• When you borrow money, the lender needs reassurance that you will repay your debt. The lender may attach a lien to your property or asset until your debt is paid in full. When a bank gives you a mortgage, the bank has a lien against your house. If you fail to pay your taxes, a government may put a lien on your property or assets to force tax collection.
  
  

Failure to Pay a Debt

• Neglect to make your car or boat payments and the dreaded repo man may visit you. If you fail to make payments and/or cannot reach an agreement with your creditor or lender as to how your debt will be paid, more aggressive collection means might begin. Legal proceedings can be filed against you.
  
  

Establishing a Lien

• A creditor or a government might sue you. In court, you will be allowed to explain your failure to pay. (Perhaps there was a mistake in the amount being claimed against you.) After the amount of debt owed is determined by the court, a judgment will be entered against you. If you fail to pay the judgment, a lien can be against your property or assets to ensure debt collection, when the property is later sold. A lien creates a "secured" debt.
  
  

Satisfying a Lien

• To collect a judgment, the court issues a writ of execution, showing the judgment, how much, and whom you owe. That writ is used to collect the judgment. The Sheriff can also "serve" that writ to your bank, and ask that funds from your bank account(s) be used to pay the judgment. The bank will comply, as allowed by law.
  
  In addition to collecting a judgment, a sheriff's lien sale can also occur if a bank forecloses on your home, a government issues a tax lien against you, or a creditor established a lien against you. The sheriff will sell your property at a lien sale. People wishing to buy advertised properties attend the sheriff's lien sale and bid, just as at any auction. Your debt will be paid from the proceeds of the sale of your property.
  
  

Removal of the Lien

• The lien will be removed from your property when your debt is fully paid. The auction bid accepted by the sheriff must cover the balance of your unpaid debt plus other charges associated with the sale. The price paid will rarely be the value you might receive were you to sell your property on the open market. If the auction price exceeds the unpaid balance of your debt plus all the associated sheriff's expenses, the sheriff will pay any excess to you. Once the sale is consummated, and the property and moneys have changed hands, the lien against you is gone.