What is the legal definition of a lien?

A lien is defined legally as a right or legal claim upon a property that allows a creditor to possess that property if the debt owed is not paid. This claim secures the interest of the creditor and provides them with a mechanism to recover the amount they are owed, typically through the seizure and sale of the property.

In the context of tax collections, a tax lien is especially significant because it allows local, state, or federal authorities to secure their interests in property against unpaid taxes. This means if a property owner fails to pay their owed taxes, the government has the authority to place a lien on the property, which can lead to foreclosure if the debt remains unpaid.

Understanding this definition is crucial for anyone involved in tax collection or property finance since it encompasses the legal rights associated with debts and the possible consequences for the debtor. The other options reflect different legal or financial concepts but do not encapsulate the specific nature of a lien as it relates to legal claims on property due to financial obligations.