Why An Attorney May Issue A Tax Lien
Attorney's expect to be paid, and when they aren't they have a legal way of getting
it! When attorney's fees go unpaid, the attorney has the right to lien (or hold)
the client's property, money or case settlement until payment is made for all
legal aid and advice given. They may also request payment for all legal filings
and associated fees.
An Attorney's lien is a judgment placed on a person's personal property or
real estate in order to recoup lost revenue from a failure to pay a bill or
their taxes. If the debt remains unpaid, then the lien holder (the Attorney
in this case) may have the right to liquidate the liened asset in order raise
the funds owed. The most common liens are: property liens, tax liens and mechanic's
liens, and of course, attorney's liens.
Since an attorney has the right to be paid for services rendered, the attorney
has a claim ton the client's property until such time as compensation for their
work is paid.
There are two main types of attorney's liens: A charging lien; and a retaining
lien.
Charging Lien.
A charging lien is a way for a lawyer to lay claim to the money obtained in
a particular action suit. An attorney has a right to a certain percentage (usually
outlined at their first client/attorney meeting), of any judgments (or monies
awarded to a plaintiff by the courts), that has been won for the client through
the attorney's professionals services.
Since some judgments can be quite large, it is not uncommon for a lawyer to
file a lien against it even before the money is awarded, to ensure they will
receive the amount they are due. This also allows the lawyer to receive his
portion first, even before the client receives the awarded funds.
Retaining Lien.
A retaining lien is a much more general lien. This type of lien allows an attorney
to lay claim to all of the property a client may be given possession of during
the course of a lawsuit. This is especially common in high-profile divorce proceedings
where there may be money, real estate, and personal belongings of great worth
awarded to a client. Until the lawyer is paid in full for his law services,
he may keep a portion (or all) of the property to pay for his services under
the retaining lien laws of the particular state where he/she is licensed.
Attorney's lien laws were instituted to ensure that lawyers who spend hundreds
of hours working on a particular case that may take months or years to settle,
eventually receives compensation for their work, and any filing or court fees
they may have paid during the proceedings.
In the event a legal debt goes unpaid, the lien allows the attorney to either
keep the money or property or sell it to recoup any losses they have suffered
due to the debt owed.
Mechanics Lien
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