• A lien is a claim or legal right to an asset that is commonly used as collateral to pay off a debt.
  • The creditor may be able to confiscate the asset that is the subject of the pledge.
  • Bank, property and tax are the three types of collateral.
  • If the property contract is not paid, the lender has the legal right to confiscate and sell the property.
  • Various types of liens may be established, including by a creditor, a court decision or a tax authority.