PayDay Loan

Payday loans are short term loans with extremely high interest rates.  Typically the term of the loan is your next payday.  Interest on payday loans is very high.  Payday loans are legal in Ohio.

Definition of Creditor

A Creditor is someone you owe money to.  A secured creditor has a lien on your property to make sure you pay the debt.  An unsecured creditor does not have an interest in your property.  An unsecured creditor can become a secured creditor if they sue you and win.

What is Forgiven Debt

Forgiven Debt, or debt forgiveness, is when your creditor gives up.  They charge off the debt and take the loss.  They report the loss on their tax returns.  Their loss becomes income to you.  The IRS will tax you on forgiven debt.

When you settle a debt for less than you owe debt is forgiven.  You will owe taxes on the amount of forgiven debt.

What is a Tax Lien

A Tax Lien is a legal right the government has in your property.  If you fail to pay your income taxes a tax lien may be placed on your property.  The government can take your property and sell it to pay your taxes.

Taxing agencies are not required to file a lawsuit first.  They just need to file the lien in the court and they have a right in your property.

Federal tax liens affect your property wherever is it.  The federal tax lien may be filed in the state in which you live.  Your property in another state is still affected by the lien.  State tax liens are similar to federal tax liens

What is a Judgment Lien

A Judgment Lien gives a creditor a right in your property after winning its lawsuit.  It helps the creditor collect what you owe.  If you don’t pay you may lose your property.

A judgment lien is created after you have been sued.  If the creditor wins its case it can obtain a certificate of judgment.  The certificate is filed in the common pleas court.  Your creditor now has an lien on your property.

Your creditor may try and sell the property or foreclose on it.  Your creditor may wait for you to try and sell the property.  When you do try and sell the property the creditor with the lien will need to be paid.


Foreclosure is the legal proceeding against the property.  This happens when you have not been paying your mortgage.  When you signed the mortgage you gave the bank the right to foreclose if you failed to pay them.

What is a Lien

A Lien is a legal right your creditor has in your property.  It ensures you will pay your debt.  A lien can be enforced (you lose the property) if you do not pay the debt.

The bank you pay your car loan to has a lien on your car.  The bank will repossess your car if you do not pay the loan.

A home mortgage is a lien.  It gives the bank the right to take your house through foreclosure.