What is a Blanket Lien?
Sometimes referred to as an all-assets lien, the blanket lien is an entitlement that is granted to a creditor as security for repayment of loans or other resources that are extended to a debtor. The blanket lien is unique in that it allows the creditor access to all assets that are owned by the debtor in the event of a default on the loan agreement. The purpose of the blanket lien is to allow individuals and businesses that wish to pledge multiple assets as collateral for loans to obtain financial assistance. Unlike a lien agreement on a vehicle, which usually allows the creditor the right to repossess the vehicle in the event of the debtor failing to make regular payments on the debt, a blanket lien goes much further. At the discretion of the creditor, any of the items listed as a security interest for the loan may be called upon to retire the remaining debt on the defaulted loan. The debtor has no say in which of the pledged collateral may be collected and used to settle the debt. Bl
Related Questions
- I was told that if the debtor pays off the loan and later reborrows from the same lender, using the same collateral, a new financing statement needs to be filed. Is this true?
- What kind of collateral may be included under the blanket lien of 1-4 family owner-occupied residential loans?
- What is a Blanket Lien?
