Lien is a technical term in law that refers to the legal claim that an owner of a property has against a debtor who holds the property as security for a debt.
Levy, on the other hand, is the collection of money by force, but the two are confused because of the similar meanings of the words; however, there are distinct.
- A lien is a legal claim on a property that a creditor uses to secure payment of a debt, while a levy is the legal seizure of property to satisfy a debt.
- A lien is a passive tool used to secure payment, while a levy is an active tool used to collect payment.
- A lien gives the creditor an interest in the property, while a levy allows the creditor to take possession of the property.
Lien vs Levy
A lien is a legal claim against a property that gives the lienholder the right to take possession of the property if the owner fails to fulfill a financial obligation. A levy, is an action taken by a creditor or government agency to seize and sell a debtor’s property to satisfy a debt.
A lien is a legal type of security interest that is taken in an asset. A lien can be taken against personal or real property.
A lien is a process where a creditor can claim property until a debt is paid.
The term lien is used interchangeably with a mortgage, although technically, they are vastly different.
A levy is a tax that is collected by governments by force.
They are collected when a certain job must be performed, such as when a citizen fails to perform a required task or when they try to avoid paying the tax by concealing their wealth or avoiding tax payments dates and notices.
|Parameters of Comparison
|Lien is a security interest provided to the party you owe money.
|A levy is a legal process by which a creditor takes property from a property owner to pay off the debt.
|Lien is declared with consent and as part of contracts.
|A levy on the other hand is a forceful acquiring of money.
|Lien on a property gives you temporary non-recorded ownership upon the property registered.
|Levy gives you the right to seize money as per the amount owned.
|A lien is placed on the property.
|A levy is applied to a person’s wages or bank account.
|The property of lien is a vehicle or real estate
|Levy is most commonly used in reference to levying taxes.
What is Lien?
A lien is a legal claim on property to secure the payment of a debt or the performance of an obligation.
Generally speaking, a lien creates a security interest that must be recorded in order to have perfect priority against third parties.
For example, if a party enters into a contract with a contractor to build them a commercial property, the contractor could have a security interest in the property.
If the contractor is not paid in full, it could have the right to take possession of the property until it is paid.
A lien is a legal claim on your property you have on account of a debt you owe. Liens also apply to unpaid taxes and unpaid child support obligations.
Property liens give creditors and others a legal interest in your property when you fail to pay the money you owe.
Liens are part of the legal system that prevents you from selling or doing anything else with your property until the debt or obligation is fulfilled.
These liens can be a great way to streamline the process of getting a business loan, especially if you are a startup business without much in the way of collateral.
What is Levy?
A levy is a tax that’s placed on a particular person, group, or product.
They’re used for the express purpose of collecting more money for the government.
If a levy is placed on a tax-paying entity, that entity must pay a certain sum of money to a certain group of people, after a specific amount of time, without fail.
This is a monetary penalty for not fulfilling a specific debt or obligation.
For example, if you don’t pay your taxes, the government may impose a fee on you. If you don’t pay your taxes, the government will levy upon you.
A levy is a tax, duty, or assessment that is raised on a certain category of person or property.
A levy can be used for a number of purposes that are restricted to a certain subject.
For example, many times, levies are placed on vehicles for the purpose of road repair.
However, it is possible for a levy to be placed on individuals or businesses.
The Levy is recouped through the person who is taxed paying the amount that is assessed to them.
In most cases, a levy is placed on something or someone to be paid in installments. A person who is levied is able to appeal the payment.
This can be done in person or in writing. A levy can be paid in installments or all at once. Generally, the Levy is collected by the person who is making the Levy.
Main Differences Between Lien and Levy
- Essentially, when you put a lien on a property, you are guaranteeing that you will have a claim to that property when the debt is paid, while levying gives you the right to force cease a property.
- A lien is something that gives you ownership of an asset. On the other hand, a levy is a legal situation when the government seizes an asset such as a bank account or home.
- A lien is the right to secure a debt by means of real property which belongs to another person. A levy is the actual sale of the property to pay the debt.
- A lien is a charge against property for payment of debt. It creates a creditor’s right to the property until the debt is paid or the property is forfeited by the owner. However, levying gives you direct rights upon the asset that is being levied.
- A Levy is done by the government and does not require a court order. A Lien is another legal process that prevents the property from being sold off until the debt is paid. It also requires a court order and is done by a creditor.
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Emma Smith holds an MA degree in English from Irvine Valley College. She has been a Journalist since 2002, writing articles on the English language, Sports, and Law. Read more about me on her bio page.