There are limits to how creditors and lenders may go about trying to obtain returns on their investments. Above all else, they should use tact and be respectful when they go about pursuing the customer (as the old adage says, “the customer is always right”).
Even when creditors do their best to accommodate debtors’ needs and handle their claims responsibly, debtors will be intent on avoiding the promises they made in taking out a loan or a line of credit. It should be noted that a certain degree of volunteerism may factor into lien law in some circumstances. In other words, debtors may willingly assent to placing a lien on property that belongs to them as terms of an agreement to take out a sizable loan, as in a home mortgage situation.
However, the scope of lien law applies not only to contractual creations. Adversary litigation may await the debtor if some charge is allowed to go unpaid. With the previous example of the mortgage, the lender and the holder of the lien are one in the same, and there would be few legal options for the borrower outside of filing for bankruptcy.
Additionally, the scope of lien law exceeds mortgages and real estate. Assets may be held from debtors for services rendered without due compensation. One salient emblem of this is what is known as an attorney’s lien. If individuals and their lawyers are able to win cash settlements, for example, but these people refuse to pay their legal representatives as per specified fees, the attorneys have the right to refuse the return of the award to their clients until their terms are met.
