Real Property Lien:

 

A real property lien is a legal claim against the debtor's real estate (like a house, land or commercial property) to secure payment for an unpaid judgment. It acts as a public notice, recorded in government records, that encumbers the property's title, making it difficult to sell or refinance until the judgment is paid.

 

A real property lien can be put into place when there is a money judgment entered in a court of law. The judgment creditor is free to pursue collection of the money judgment and one way for the creditor to do this is to place a lien on any real property owned within the court’s jurisdiction. Real property with a lien on it cannot be sold, transferred or refinanced until the lien is paid in full and removed. In some extreme circumstances, the judgment creditor can move to foreclose on a real property lien.

 

Personal Property Lien:

 

A personal property lien becomes public record, affecting the debtor’s credit profile and limiting their ability to obtain new credit or complete asset transactions (including rental and employment applications, credit cards, loans, homes, cars, real estate, business loans and others) until the lien is paid in full. It also attaches to non-real estate assets (like equipment, furniture, vehicles, etc).

 

A personal property lien protects the creditor’s right to seize or repossess certain assets, giving the creditor a right to that property if the judgment remains unpaid.

 

A personal property lien formally documents the judgment, ensuring it is recognized by the bankruptcy court if the debtor attempts to file for bankruptcy.