Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
A lien is virtually an interest or stake in a given property. It refers to the process of establishing a claim on a property with the objective of securing the payment of a debt or ensuring the performance of an obligation. A lien only materializes when a grantee or a beneficiary acquires some interest in a collateral property. Liens act as liabilities when it comes to the value of a property. They are attached to the property and are transferred with every change in ownership. This is why most prospective buyers refuse to purchase any property that has liens attached to it.
Each type of claim or lien falls under a particular combination of two primary categories. They are known as voluntary or involuntary liens and general or specific liens. Here, we will discuss what a general lien involves.
A general lien is a type of claim or interest that a creditor holds over all the properties owned by the debtor. A general lien is held by the creditor even if the total value of all such properties combined may be much more than what the debtor actually owes. This chiefly differs from a specific lien which basically entails a claim over a specific piece of property owned by the debtor. For instance, a particular car loan may come under the category of a specific lien.
A general lien is not exclusively attached to any singular asset owned by the debtor. Instead, it indicates an interest attached to all of the assets owned by him. This may include all properties, residential or commercial, owned by the debtor. This may even include financial assets like bank accounts and also any personal properties under his ownership.
Possessing a general lien over a debtor assets allows the creditor to go after any and every valuable property belonging to the debtor in order to recover the debt due to him. In a specific lien, the creditor is restricted to liquidating a specific asset to recoup his debt whereas with a general lien he has a legal right to pursue all existing assets.
