Eliminating Liens

Using the Federal Trade Commission’s Credit Practices Rule some liens against household property can be invalidated. The household property that fall into the category for invalidation are those that are considered goods or necessities.

In order to use the FTC Credit Practices Rule to invalidate a lien the lien must be a consumer good, not the property of a business. This applies to some non-purchase-money and non-possessory security interest liens. A lien is a non-purchase-money security interest lien when the money received from the debt is not used to purchase the property, but rather the property was used to secure the loan. It is non-possessory when the person with the lien against them (debtor) owns the property rather than who has the lien against them. What is considered household goods and necessities may vary but generally clothing, personal items such as photographs and documents, clothing, and appliances.

Many creditors will avoid this type of lien because they know that it could be invalidated. However, it is still possible to have this type of lien against you and it is important to understand your options if the lien against you falls under the category described above.