Business debt is part and parcel of commercial sectors throughout the country and the world. It often causes no problems — issues seem to arise only in the collection of said debt. Fortunately, an attorney can help businesses recover what is owed using various methods, including filing liens on real property. But many wonder, “When might filing a lien be appropriate?” and “What are the benefits and drawbacks of filing a lien to collect a debt?” A meeting with an experienced attorney will provide you with the answers you’re looking for.
Weisblatt Law Firm is a premier business law firm that represents businesses and individuals in the business world. If you need efficient debt-collection services, contact our office for a consultation at (713) 666-1981 today.
What Is a Lien on Real Property?
A lien on real property prevents that property from being sold without first paying off the lienholder. The lien itself represents a particular sum of money that the property owner owes to someone. In business, money is owed for various reasons, including:
- Unpaid goods and services
- Unpaid loan payments
- Unpaid damages or judgments.
Regardless of why a business owes money, the business or person to whom it owes the money can seek to place a lien on its property.
What Are the Types of Liens That Can Be Filed?
Generally speaking, liens can either be voluntary or involuntary. When it comes to collecting business debts, the lien will be an involuntary one, meaning it is placed on the debtor’s property without their consent.
There are two types of involuntary liens: statutory and judicial. Statutory liens provide the authority to put a lien on a business’s real property and may be found in state and federal law provisions. Types of statutory liens include:
- Mechanic’s lien
- IRS lien
- Property tax lien.
Statutory liens don’t require any judicial judgment or order. Their authority comes from the statute itself. However, judicial liens get their power from judicial pronouncements or judgments. They are often used in the non-commercial sector for delinquencies related to child support, alimony, and lawsuit judgments.
Weisblatt Law Firm works diligently to help its clients collect valuable business debts.
What Type of Real Property Lien Should I Pursue?
The type of lien you should pursue depends entirely on the circumstances of your case. For example, if you performed property or landscaping work for a business and it did not pay you, you would likely seek a mechanic’s lien on the business’s property. Until your debt has been satisfied, the business cannot sell the property.
If a business owes you money from a lawsuit, you would seek not a mechanic’s lien but a judicial lien. The judicial lien will have the same effect as a mechanic’s lien, which is to attach the property with a debt that must be paid before the property is sold.
Key Steps Involved in Filing a Lien
Perhaps the most recommended step before filing a lien for a business debt is to consult with an experienced business debt attorney. The stakes are too high and the law is often too complex to leave this matter to anyone other than a competent professional. Once you have an attorney, they will shepherd you through the process while safeguarding your interests.
One of the first things you will have to do for your lawyer is gather all relevant documents necessary to prove the debt, such as bills, receipts, and statements. These documents will be used to obtain a court order allowing the lien.
Your attorney will then file your claim in court to obtain an official judgment. This judgment will provide the authority and basis for the lien. Then, your attorney will seek to enforce the judgment, which requires public notice. If other creditors are seeking money from the business as well, priority typically goes to the party who filed first.
Timing Is Important
Whether you are filing a mechanic’s or a judicial lien, keep in mind that important timing rules are in play in these cases. First, mechanic’s liens must be filed within 90 days of the last work done by the contractor or worker seeking to collect. Additionally, contractors and workers must provide notice, and they have a one-year time limit to enforce the lien after it has been filed.
Get Debt Collection Help Today
If you are owed business debts, you understand how important it is to collect these debts sooner rather than later. The longer you wait, the more likely your company will be to receive nothing — or much less than it is owed. An experienced business debt collection attorney can help you recover debts through liens on real estate and many other methods. Reach out to a seasoned business debt collection attorney promptly.
For a free telephone consultation, contact Weisblatt Law Firm today at (713) 666-1981. Explore your case and business debt collection options with an attorney who cares.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
