Can a Lien be placed on property for unsecured debt?

Answer 1

Yes.

For example, even without a written security agreement, your house or car or other property can have a lien attached when you have not paid for work done on them. This is called a "mechanic's lien" and could also apply to anyone who has delivered materials to your contractors for home improvement but have not yet been paid.

Any unpaid debt can result in a lien when a creditor sues you and wins a judgment against you. A judgment lien can be used to freeze a bank account or prevent the sale of real property once it has been recorded in the land records.

If state or federal tax authorities discover a bank account, or other valuable property, belonging to a tax delinquent, the account will be frozen or the property will be seized. For a frozen bank account the tax delinquent will generally be notified by the bank.

Another type of lien would be for non-payment of property taxes. Unless you resolve these within a prescribed period, the town/city could then file a "tax deed", taking title to your property, which is then sold at public auction to pay for the delinquent taxes.

Answer 2

The creditor must sue in civil court. if it prevails they can request the court issue a judgment lien. Once the judgment lien is recorded in the land records your property cannot be sold or mortgaged until the lien if paid off. Once the judgment is issued the debt begins to accrue interest. In Massachusetts the rate is 12%.