What is described by the term "lien"?

What is described by the term "lien"?

• A. A legal agreement
• B. A charge against property
• C. A type of contract
• D. A criminal charge

Answer: (B)

The term "lien" refers to a legal right or interest that a lender has in the borrower's property, granted until the debt obligation is satisfied. Specifically, it serves as a charge against property to ensure the repayment of a loan or the fulfillment of an obligation. When a lien is placed on a property, it means that the creditor has a legal claim over it, which can affect the owner's ability to sell or refinance the property until the owed debt is resolved. Understanding this definition is crucial, particularly in legal and financial contexts, where liens often come into play in transactions involving real estate or as part of secured lending agreements. This charge acts as security for the creditor, ensuring that they can recover the owed amount by potentially seizing the property if the debtor fails to meet their financial obligations.

The term "lien" refers to a legal right or interest that a lender has in the borrower's property, granted until the debt obligation is satisfied. Specifically, it serves as a charge against property to ensure the repayment of a loan or the fulfillment of an obligation. When a lien is placed on a property, it means that the creditor has a legal claim over it, which can affect the owner's ability to sell or refinance the property until the owed debt is resolved.

Understanding this definition is crucial, particularly in legal and financial contexts, where liens often come into play in transactions involving real estate or as part of secured lending agreements. This charge acts as security for the creditor, ensuring that they can recover the owed amount by potentially seizing the property if the debtor fails to meet their financial obligations.