Browse terms
Secured debts and liens
Statutory lien
A statutory lien is a lien that arises solely by force of a statute when specified circumstances or conditions exist, or a lien of distress for rent. It does not include a security interest or a judicial lien. 1
Talk to a lawyerHow does a statutory lien work in bankruptcy?
The Bankruptcy Code sorts liens by how they come about. A statutory lien arises automatically and is not based on an agreement to give a lien or on judicial action. 1
The Senate report on the definition gives mechanics', materialmen's and warehousemen's liens as examples, and says tax liens are also included. 1
A bankruptcy trustee can undo some statutory liens: one that first takes effect when the bankruptcy case is filed, one that is not perfected or enforceable against a good-faith buyer on the filing date, and a lien for rent or of distress for rent. 2
The type of lien matters for exemptions. A debtor may avoid a lien that impairs an exemption if it is a judicial lien or one of certain security interests in household goods, tools of the trade or health aids. Statutory liens are not on that list. 3
Liens that are not avoided stay with the property. Exempt property remains liable for a debt secured by a lien that was not avoided, and for a tax lien of which notice is properly filed. 3
How is a statutory lien different from other liens?
Common questions
What qualifies as a statutory lien?
A lien created by a statute itself, not by an agreement or a court. The Senate report on the Bankruptcy Code's definitions names mechanics', materialmen's and warehousemen's liens, and says tax liens are included too. 1
Is a judgment lien a statutory lien?
No. A lien obtained by judgment is a judicial lien, and the definition of statutory lien excludes judicial liens. 1
Can I remove a statutory lien because it impairs an exemption?
The provision that lets a debtor avoid liens impairing an exemption names judicial liens and certain security interests. It does not name statutory liens. Other rules may apply to a specific lien, so ask a bankruptcy lawyer. 3
Sources
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