Lien Priority

Lien priority refers to the order in which claims on a debtor's assets are paid, usually in the event of bankruptcy or property sale. Liens are legal rights that creditors have over a debtor’s property as security for a debt. Generally, the first lien placed on a property has the highest priority, meaning it gets paid first. Subsequent liens are paid in order of their establishment. This hierarchy affects how much creditors will ultimately recover, and understanding this can help borrowers manage their debts and obligations more effectively.