Utah Code Liens 38-8-3: Enforcement of Lien–Notice Requirements–Sale Procedure and Effect Liens Enable Creditors to Assert Rights Over PropertyUnless the debtor is prudent and has taken measures to safeguard his assets, there is a risk that the creditors can seize assets and take your wealth. In order to know if your assets are at risk, it is imperative that you have an understanding of the different types of liens you may encounter as a small business owner: Consensual Liens Are VoluntaryAs the name implies, consensual liens are those to which you voluntarily consent, as a result of a loan or other advance of credit. The property purchased secures the buyer’s obligation to pay for the property. One common example is the residential mortgage: a home buyer consents to a bank taking a security interest in the home when a mortgage is obtained. Similarly, a security interest also is created when a car dealer arranges for financing for a car buyer. There are two broad classes of consensual liens: Statutory and Judgment Liens Arise by Operation of LawIn addition to consensual liens, there are many different types of liens that creditors can use to get at your assets to satisfy a debt. In certain circumstances, creditors obtain security interests by the operation of state (or federal) laws. These liens include: Judgment Liens Arise As a Result of a LawsuitOf the three types of liens (consensual, statutory and judgment,) the judgment lien is the most dangerous form, but one which the informed business owner may be able to eliminate. A judicial lien is created when a court grants a creditor an interest in the debtor’s property, after a court judgment. Judgment liens can arise in a wide variety of circumstances basically, any incident that can land you in court can end up generating a judgment lien. For example, if you are driving negligently and injure someone in an accident, the injured person may to sue for damages. To the extent that your insurance doesn’t cover the judgment, a judicial lien may be placed against your property to secure payment of the claim to the injured party. A plaintiff who obtains a monetary judgment is termed a “judgment creditor.” The defendant becomes a “judgment debtor.” The judgment in the lawsuit provides the basis for the lien. If the debt is not paid, the judgment creditor can then seek to enforce (or execute) the judgment. This can be accomplished by garnishing wages, seizing a bank account, or placing a lien against the debtor’s property. The lien is the first step by the judgment creditor in a process that will culminate in a sale of the attached property, to satisfy the judgment debt. Any lien placed on the defendant’s assets as a result of a court judgment is known as a judgment lien. If a lien were placed on a home, the judgment creditor could then seek to foreclose on the property, in the same way a mortgage holder such as a bank could foreclose if it were not paid. In this section, the term “judgment lien” is used in its strictest sense: a lien attributed to a court judgment, where the court judgment itself is the basis for the lien. An example would be a plaintiff who is awarded a monetary judgment against a defendant in a lawsuit based on negligence, and who then is granted an order of attachment against the debtor’s property. In contrast, this definition excludes a judgment based on a pre-existing lien (i.e., a prior consensual lien or statutory lien). Thus, for example, this definition would exclude a judgment in a mortgage foreclosure. This distinction is critically important in discerning what types of liens against exempt property can be eliminated. Notice to PerformIn real estate, a notice to perform is a document that sets up a contract with detailed expectations for either the buyer or the seller. If the expectations are not met, the party that sent the notice can cancel the real estate deal. The notice to perform serves two purposes—it gives the first party the chance to tell the other that there is an issue, and the second a chance to fix it before the deal is canceled. A notice to perform is a real estate clause or contract that requires parties to act by a set date. In many instances, you must give the notice to perform before you can cancel a purchase contract. Either the buyer or the seller can issue a notice to perform. However, the two parties may approach the process with different goals. You aren’t required to send a notice to perform if a buyer or seller misses a deadline. A gentle reminder from your real estate agent might be appropriate, but it depends on your circumstances. A notice to perform is usually only used if one party wants to cancel a deal because their requests aren’t met. Sellers might demand that buyers perform because they don’t want to drag out an escrow, only to find out the buyers were never going to close. In the case of a contingency release, the seller may be entitled to the buyer’s earnest money deposit if the buyer later cancels the transaction after releasing all contingencies. Why Use a Notice to Buyer to Perform?Buyers may not be aware of all the contractual agreements they’re making when they sign a purchase agreement. However, before a seller can cancel a contract due to the buyer’s failure to do any of these things, the seller must send the buyer a notice demanding that the buyer perform. Some common seller concerns are: Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
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Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah OfficeFree Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews
Divorce Lawyer and Family Law Attorneys Ascent Law St. George Utah OfficeAscent Law Ogden Utah OfficeThe post Utah Code Liens 38-8-3 appeared first on Ascent Law. via Ascent Law https://ascentlawfirm.com/utah-code-liens-38-8-3/
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