What is a Lien in Indiana?
An Indiana lien is a security interest or legal claim that a creditor holds over a debtor's assets. A lien gives the creditor or lienholder the right to claim or possess a lienee's assets if they cannot repay a debt, meet up with an obligation, or fulfill the terms of an agreement. A lien can also cloud an asset; since liens are attached to assets and can be transferred with ownership, it is difficult to sell, transfer, or refinance an asset with a lien against it. Liens are enforced by orders issued by Indiana courts.
Are Liens Public Record in Indiana?
Per the provisions of Indiana state law, a lien is considered to be public record. Interested persons can access the information regarding a lien from the appropriate government office or a third-party aggregate site.
Types of Lien in Indiana
There are a number of liens recognized by Indiana state law, they include - property lien, judgment lien, mechanic lien, tax lien, and Uniform Commercial Code (UCC) lien. However, most liens can be categorized as either involuntary or voluntary.
An involuntary lien is a type of lien that is placed on a property against the owner's will. This type of lien results from regulatory bodies following an outstanding debt. For example, the state of Indiana issues a tax lien when a party does not pay tax. Therefore, the Department of Revenue Service may lay claim to the debtor's real estate, personal properties, and other assets of financial value. On the other hand, a voluntary lien results from a mutual agreement. The debtor consensually grants the lien to the creditor as collateral to secure a debt repayment.
In Indiana, liens may also be specific or general. A specific lien is placed on a particular property of value, which may be sold to cover the amount owed. On the other hand, a general lien affects all the debtor's property.
What is a Property Lien in Indiana?
A creditor may file a claim against a debtor's property if the debtor cannot repay the debt or meet the requirements of a contractual obligation. The creditor may sell the debtor's property to make up the debt; however, the creditor and the debtor must first attend a Proceedings Supplemental hearing. At the hearing, the court will take stock of the debtor's assets and exempt those protected from creditors. Indiana property exemptions include:
- $7500 for a mobile home or a single person's house
- $15000 for a mobile home or a couple's house if one spouse is the debtor. A creditor may not claim the home if both spouses are debtors
- $4000 for household goods, cars, cash, clothes, or other personal property
- $100 in stocks, bonds, and bank accounts
- Pension funds and aids
In Indiana, the maximum amount of property exempted for an unmarried person is $10,000 and $20,000 for married people. Property liens last for ten (10) years in Indiana; the creditor must obtain a writ of execution from the court within this time; however, if the creditor can prove that the debtor's situation has changed and the debtor should be able to pay the debt, the creditor may obtain the writ after ten (10) years.
Other types of lien include tax liens, mechanics liens, child support liens, and judgment liens.
How Do You Know if a Property Has a Lien in Indiana?
A voluntary lien is easy to uncover because it is attached with the knowledge of both the debtor and creditor. The same cannot be said for an involuntary lien. Hence, to know if a property has a lien, requestors must query the county clerk's office in the county where the lien was filed.
Alternatively, title professionals may locate liens and carry out property searches for correct information on the ownership of a property. A title agent can also provide documents on the history of a property and its deeds.
Ultimately, homeowners are advised to hire the services of a real estate attorney. In the case of liens attached to automobiles, requestors may contact the Indiana Bureau Of Motor Vehicles (DMV).
Property Lien Search by Address in Indiana
Property lien searches in Indiana are generally carried out by name, usually with the property address as additional information. In Indiana, a person can use the online services offered by different counties through third party websites to access information on a property lien. In Marion County, for instance, a person looking for a property lien may do so by visiting the Marion County Recorder's Office online, which uses a third party website to provide information on a lien property search for a fee. An individual may however find it possible to search for a property lien using an address by going to the Recorder's Office in the county where the property is located.
Free Property Lien Search by Address
Property Lien searches which are usually conducted by name in Indiana, may be conducted for free by visiting the County Recorder's website. For instance, any individual who wishes to conduct a free property lien search in Allen County may do so by visiting the Allen County Recorder's Office website online, clicking on the Free Data Search icon, and providing the required information to complete the search at no cost.
What is a Tax Lien in Indiana?
When a person fails to meet up with federal or state tax payments, the IRS or the Indiana Department of Revenue (IDOR) may file a lien against the debtor. A federal or IRS tax lien applies to the debtor's assets and home and makes the IRS a priority creditor. This means that the debtor may not liquidate the property to repay other debts before repaying federal tax debts. An Indiana state tax lien, otherwise called a tax warrant, is filed under IDOR's supervision. The state files a tax warrant against the debtor in all the counties where the debtor has assets. The state publishes tax warrants on debtors' title searches and credit reports. Debtors can avoid tax warrants or federal tax liens by paying outstanding tax amounts as soon as the state or the IRS sends a notice.
The government may also file a lien against property belonging to persons who default on property taxes. The liened property becomes collateral, and the government may auction the property to make up the debt value. Debtors who make outstanding property tax payments within the redemption period, which is one (1) year in Indiana, may reclaim the property.
Tax Lien Lookup in Indiana
Members of the public seeking to conduct a tax lien lookup in Indiana may do so through various methods. The best source of information regarding state tax liens is the Indiana Department of Revenue which can be reached by calling (317) 232-2240. The department of revenue can also be contacted online at www.in.gov/dor. Interested individuals may also request tax lien records at the appropriate county clerk's office within the state of Indiana.
What is a Mortgage Lien in Indiana?
In Indiana, homeowners who take mortgages put liens on the home. Although the lien is on the mortgagor's property, it does not apply to the title. This means that the lien is only a security for the debt. Unless the mortgagee forecloses and sells the property in question, the ownership title cannot transfer to the mortgagee. In Indiana, foreclosure terminates the mortgagor's right to the use and possession of the mortgaged house.
What is a Mechanics Lien in Indiana?
Mechanics liens are typically issued to contractors and laborers who work on real estate. With a mechanic's lien, contractors may recover unpaid fees for the improvement of real estate. In this case, the creditor is the contractor or laborer and may sell a liened property to recover over due service fees. If the contractor or laborer rendered private property improvement services, the mechanic's lien would apply to the property. However, if a contractor or laborer files a mechanics lien on public projects, the lien will apply to project funds. Material suppliers, contractors, sub-contractors, and designers may file a mechanics lien in Indiana. The timeline for filing mechanics liens against private property in Indiana is 60 days after the last rendered service, while the filing timeline is 90 days for other projects.
What is a UCC Lien?
A UCC lien, a Uniform Commercial Code lien, is a tool creditors use to recover a debt. UCC liens give the creditor a legal claim to the debtor's property. UCC liens also notify the public of the creditor's interest in the debtor's property as debt collateral. Material suppliers in construction typically fine UCC liens to recover debts or outstanding payments for rendered services.
How to Conduct a UCC Lien Search
A UCC search reveals any individuals or groups that have indicated interest through filing a claim against property used for business activities or other assets that are subject to a debt. The details used in the search are
- Name and address of the debtor
- The number of the document
- The state and date of filing,
- The secured party's name, address, and document number
What is a Judgment Lien?
When the court awards damages as part of a civil lawsuit, the defendant is indebted to the plaintiff. If the defendant, who is now a judgment debtor, fails to pay the plaintiff, the judgment creditor or the plaintiff may place a lien on the defendant's property. A judgment lien results from a court's judgment; the court's sentence or ruling forms the lien's basis. Therefore, if an unpaid contractor enforces a mechanics lien, it becomes a judgment lien. A judgment lien ensures that a plaintiff or judgment creditor recovers outstanding payments. Judgment liens apply to real estate and are useful in Indiana for ten (10) years.
What is a Federal Tax Lien
One of the main methods the IRS employs to collect unpaid taxes like unpaid property taxes is tax liens. A lien is commonly interpreted by the law to be a charge or encumbrance placed as security for a debt or obligation on another party's property. The federal tax lien, created under the federal code 26 U.S. Code § 6321, automatically comes into place when taxes like unpaid property taxes have not been cleared by a taxpayer after being given notice and a demand by the IRS in adherence to IRC § 6323. The IRS issues a public document called the Notice of Federal Tax Lien in order to inform creditors that the government has a legal claim to a debtor's property. Complete payment of tax amount is the best way a debtor may remove a federal tax lien. The IRS discharges the lien within 30 days after complete payment has been made.
What is a Lien Title?
If there is a lien on a piece of property, it means that the property was utilized as loan collateral. The bank typically places a lien on the title of a car for which a loan was taken out to pay for the purchase. This is known as the lien title. In the event that the borrower defaults on their loan, this enables the bank to recoup some of the money it paid them.
Where and How to Do a Title Search in Indiana
Websites run by the government and other organizations make it fairly easy to look for public records of property titles. Conducting a title search involves
- Looking for information about a property title's background in a county records office: County offices in Indiana do not run title searches for individuals, however, such records can be viewed by visiting their offices in person. These public records could be examined during a title search:
- Deeds.
- court documents.
- indexes by name or property.
- various other real estate paperwork or land records.
- Using a Title Search Company: these companies are licensed in Indiana to assist individuals in finding information on a property title for a fee. They often provide thorough analysis of all records for a property, including easements, chain of title, taxes and liens amongst others
- Searches by Title Insurance Company: these conduct property title searches whilst providing insurance against losses incurred from a defective property title.
- County Assessor's office County Court: Additionally, Indiana citizens can access their county court's online property records database and their county assessor's office.
The Indiana Bureau of Motor Vehicles' (BMV) online database allows residents of Indiana with an account to conduct a title search on any car at any time by using a Vehicle Identification Number (VIN) or a Social Security number.
Voluntary Lien vs Involuntary Lien in Indiana?
A property owner willingly grants a legal property claim to a creditor as security for a debt in a voluntary lien. Voluntary liens are typically contractual; a mortgage is an example of a voluntary lien. On the other hand, an involuntary lien is neither contractual nor consensual; a creditor typically files an involuntary lien without the debtor's consent. Judgment liens are examples of involuntary liens. Other involuntary liens include tax liens, child support payments, and mechanics liens.
How Creditors Collect Payment Through a Lien
A creditor who has a lien attached to a property may either take ownership of the property or sell it off to cover the amount owed. The primary objective of a lien is to serve as a surety to protect the creditor's interest.
How Do I Get a Lien Removed in Indiana?
In Indiana, liens can be removed by:
Paying it off
The most effective way to remove a lien is to pay off the debt. After payment is completed, the Indiana Department of Revenue sends a notice to the lienholder to drop the lien against a property by filing a proof of the debt settlement.
Taking legal action
A debtor may file a lawsuit to remove a lien. However, taking legal action requires the debtor to provide sufficient reasonable ground to convince the court to remove a lien.
Filing for bankruptcy
Another possible means to get rid of a lien is to file for a Chapter 7 or Chapter 13 bankruptcy. The declaration retires every form of debt collection until the statute of limitations expires and is effective for judicial liens and mortgages.
How Long Does a Lien Stay on Your Property in Indiana?
The length of time a lien stays attached to a property in Indiana varies depending on the type and purpose of the lien. A judgment lien in Indiana stays active on a debtor's property for ten years regardless of a change in the ownership of the property. A mechanics lien only stays for one year, and after this window elapses, it becomes void. However, property liens share the same statute of limitations as judgment liens.
