A lien auction is a sale of assets to recover past-due debts, such as property taxes or utility charges. Liens can be placed on property, cars, and personal property, and if the debt is not paid, these assets can be sold at a lien auction. There are two types of property lien auction: a deed auction and a certificate of lien auction. Buyers should be careful when purchasing at lien auctions as items are sold as is and refunds are not available.
A lien auction is a sale of property or assets to satisfy past-due debts, typically in the form of unpaid property taxes. Lien sales may also be held to cover unpaid income taxes, utility charges, and other forms of financial delinquency. Depending on where in the world you are, lien sales can take place on a regular basis, usually near courthouse steps, reflecting a longstanding tradition of recovering debt and filing for bankruptcy at regional courthouse steps to make official the process.
Liens are legal instruments used to collect debts. When a lien is placed on something like property, it means that the property cannot be transferred or sold until the lien has been resolved. Liens can be collected on houses, cars, and personal property, and if the debt is not paid, these assets can be sold at a lien auction overseen by a government official, with the goal of the auction being debt recovery .
Assets like cars and machinery are usually sold outright at a lien auction, which means that once they sell, the new owners take possession and the former owner has no recourse. The agency initiating the auction will often inventory the items and arrive at an estimated value, using that value to set up a reserve for the auction, ensuring enough money is recovered to cover the lien.
There are two types of property lien auction: a deed auction and a certificate of lien auction. In a deed auction, the buyer pays off the past-due debt and takes possession of the property. In a certificate of lien auction, the buyer pays off the debt and the property owner has to pay the buyer back, often at a very high interest rate. If the buyer does not pay the debt, the certificate holder can take possession of the property.
Some people like to attend lien auctions because they can be a great way to get things for a very low price. Since the goal is debt recovery, rather than maximizing the sale price for profit, the contents of a lien auction may be available at a fraction of the current market price. However, property purchased at a lien auction is sold as is, and buyers generally do not have the opportunity to inspect it. Buyers are not entitled to refunds if they purchase damaged or unusable goods at a lien auction, so it pays to be careful when spending at lien auctions.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
