Liens are filed through the legal court system, typically in the courthouse of the county in which the conflict occurs, explains Remodeling Magazine. Each state has its own legal rules and procedures for filing either a mechanic's lien or a judgement lien.Continue Reading
The Mechanic's lien is often used by individuals seeking payment for services rendered, according to RocketLawyer. Individuals or businesses contracted to do property improvement jobs can file a mechanic's lien, also known as an artisan's lien, against parties who fail to pay for contracted work already completed. Depending on state laws, contractors have a limited time to file a lien, and courts usually stipulate that a lien must be filed within 90 days after the last day the contractor worked at the property.
Information on a mechanic's lien includes the name of the property owner, the person who ordered the work, a legal description of the property and the amount owed, states Remodeling. The contractor files the lien in court, and it is sent by certified mail to the property owner. Contractors need to file a foreclosure suit to ensure payment.
A judgement lien is used by creditors owed a debt. After winning a monetary court judgement, creditors must file the lien in the debtor's county or state to ensure the lien is attached to the debtor's property, notes Nolo. In some states, the lien is automatically recorded and no further action is needed.Learn more about Personal Banking