What does it mean to have a lien on a business?

A corporate lien is legal claim against a business for money owed to another entity. A corporate lien is usually placed on a business for a debt or unpaid bills owed to another business. 1 A corporate lien is placed on the debtor company’s assets to record that the company has outstanding financial obligations.

How do you get money from a company that owes you?

Small claims court. If you do not want to go through a collection agency, you have the option of filing a lawsuit to get the money you’re owed. Depending upon your state, you may be able to file a claim in small claims court to recover the money owed to your business.

Can a judgment prevent a debtor from avoiding a lien?

The question we are seeking to answer is whether the potentially nondischargeable nature of the judgment debt, under Section 523 (a) of the Bankruptcy Code, secured by an abstract of judgment against a debtor’s homestead prevents the debtor from avoiding the lien under Section 522 (f) (1) of the Bankruptcy Code.

Can a bankruptcy lien be avoided by a non-dischargeable debt?

W.D. Tex. 1992) (“In a situation in which the lien to be avoided is secured by a non-dischargeable debt, Congress has determined that the prevailing concern is the federal interest in seeing the debtor through bankruptcy with the sufficient means necessary to maintain a basic standard of living.

Can a bankruptcy lien be avoided on an exempted property?

The court has not ruled, however, on the issue whether the dischargeability status of a debt secured by a judicial lien affects the debtor’s right to avoid the lien.

Can a 522 ( f ) lien prevent a homestead exemption?

Extensive research has provided no cases suggesting that the potential nondischargeable nature of a debt prevents a 522 (f) (1) motion from being granted in bankruptcy. The nondischargeability of a judicial lien does not prevent a debtor from claiming a homestead exemption on the property subject to recorded judicial lien.

What happens to a company with second lien debt?

If a business falls behind on payments, loan covenants trigger that might require the sale of assets to pay down the debt. Although second-lien debt investors get paid before common stockholders in the event of a company’s demise, junior debt has its risks.

What kind of liens are good and which are bad?

Key Takeaways Consensual liens are considered good liens and do not impact your credit. Statutory liens are considered the bad kind and can will remain listed on your credit for seven years. Judgment liens are the most severe kind of lien and can remain listed on your credit for up to seven years.

How are statutory liens bad for your credit?

Statutory liens can be detrimental to your credit as they stay listed for seven years. As the most severe type of lien, judgments are the result of a court granting financial interest in your property to a creditor.

The court has not ruled, however, on the issue whether the dischargeability status of a debt secured by a judicial lien affects the debtor’s right to avoid the lien.