How do we protect ourselves from a lien since we are in bankruptcy?
Full Question:
Answer:
As a general rule, when a party provides labor, materials, or services to a property owner without a contract with the owner(hereinafter called subcontractor), that party is generally entitled to a lien for the value of labor, materials, or services provided. However, the owner is entitled to claim as a defense that the subcontractor is only entitled to a lien for the amount of the balance remaining due on the contract between the owner and the principal contractor. This defense only applies, however, to sums paid from the owner to the contractor before the subcontractor files suit or provides a Notice to Owner. This Notice communicates to the owner that the owner has a responsibility to ensure that the subcontractor is paid or the owner may be required to pay the amount due twice.
In addition, Maine law states that If a party provides labor, materials, or services, without a contract with the property owner, that owner may use a written notice to deny responsibility for the improvements. However, Maine law allows a party to file a Notice of Furnishing within ninety (90) days after he ceases to provide labor, materials, or services. This Notice will preserve the lien claimant's lien and must be filed with the register of deeds.
To create a valid lien, it is essential that the party claiming a lien should have the absolute property or ownership of the thing or, at least, a right to vest it; that the party claiming the lien should have an actual or constructive, possession, with the assent of the party against whom the claim is made; that the lien should arise upon an agreement, express or implied and not be for a limited or specific purpose that contradicts the express terms or the clear, intent of the contract. In certain circumstances, the lien holder may foreclose on the property if the debt is not paid in full. Liens can generally be removed by the payment of the amount owed. This payment can occur at any time up to and including the stage at which the closing documents for the sale of the property are signed.
There are several types of liens, all of which could cloud the title and prevent the seller from conveying marketable title to the buyer. A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. Such cases include failure to pay a debt, including credit cards, bank loans, or deficiency judgments on repossessed vehicles. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt.
In bankruptcy, a claim is broadly defined in § 101(5) as a “right to payment” and includes a right to payment that is unliquidated, contingent, unmatured, disputed, legal, equitable, or unsecured. A creditor is defined in § 101(10) as an entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor.
Please see the following statutes to determine applicability:
10 M.R.S.A. § 3251. Lien established
Whoever performs labor or furnishes labor or materials,
including repair parts of machines used, or performs
services as a surveyor, an architect or an engineer, or as
a real estate licensee, or as an owner-renter,
owner-lessor, or owner-supplier of equipment used in
erecting, altering, moving or repairing a house, building
or appurtenances, including any public building erected or
owned by any city, town, county, school district or other
municipal corporation, or in constructing, altering or
repairing a wharf or pier, or any building thereon,
including the surveying, clearing, grading, draining,
excavating or landscaping of the ground adjacent to and
upon which any such objects are constructed, or in selling
any interest in land, improvements or structures, by virtue
of a contract with or by consent of the owner, has a lien
thereon and on the land on which it stands and on any
interest such owner has in the same, to secure payment
thereof, with costs. If the owner of the building has no
legal interest in the land on which the building is erected
or to which it is moved, the lien attaches to the building,
and if the owner of the wharf or pier has no legal interest
in the land on which the wharf or pier is erected, the lien
attaches to the wharf or pier, and in either case may be
enforced as provided. If the owner of such land, building,
wharf or pier, so contracting, is a minor or married woman,
such lien exists and such minority or coverture does not
bar a recovery in any proceeding brought to enforce it.