A lien is a legal claim or right against assets that are typically used as collateral to satisfy a debt. In banking, a lien is often granted when an individual takes out a loan from a bank to purchase an asset, such as a car or a house. The lien provides the creditor with the legal right to seize and sell the collateral property or asset of a borrower who fails to meet the obligations of a loan or contract. The owner cannot sell the property that is the subject of a lien without the consent of the lien holder. There are different types of liens, including voluntary or consensual liens, such as a lien on a property for a loan, and involuntary or statutory liens, whereby a creditor seeks legal action for nonpayment. A judgment lien is a lien placed on assets by the courts, which is usually a result of a lawsuit. Different types of liens provide creditors with different rights, such as purchase-money security interest liens, non-purchase-money security interest liens, and mechanics liens. It is important to note that liens are legally binding, and in the event of a default, the lender will claim whatever property it has liens on to cover the loan.