Don’t Allow Yourself to Be the Victim of an Invalid Lien

By Josh Borsellino

A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. It is typically filed by a party claiming to be owed a debt with the state or in the property records to prevent the debtor’s property from being sold until the claimed debt is paid.  Too often, liens are used by unscrupulous companies to collect improper or disputed charges.  Many people may feel as though they have no recourse against this practice and simply pay the debt to avoid a legal dispute.  Most non-lawyers do not know there are several civil and criminal remedies available when someone files an invalid lien. Fraudulent liens can be removed by filing a Petition to Remove an Invalid Lien.  If the court finds the lien invalid, the court will generally sign an order declaring that the lien has no force or effect.  Monetary damages, as well as attorney’s fees, may also be available.  Under Chapter 12 of the Texas Civil Practice and Remedies Code, a claim for actual damages, punitive damages and attorney’s fees may be filed by the victim of a fraudulent lien. The suit may be filed in any district court in the county where the lien was filed or where real property subject to the lien is located.  The statute of limitations on a suit for damages in this cause of action is generally four years.

In addition, Section 37.101 of the Texas Penal Code makes it an offense to knowingly file a UCC financing statement that is forged, groundless or contains a materially false statement. This offense can be either a Class A misdemeanor or third-degree felony. While this is obviously not a provision that can be enforced by a civil attorney, charges under this section may be filed by the appropriate county or district attorney at the request of the victim.

The attorneys at Bailey and Galyen have experience resolving disputed liens.  If you have questions regarding an invalid lien that has been filed against your business or personal property, contact the business litigation department of Bailey and Galyen at 1-817-276-6000.

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