Filing a lien against aircraft for unpaid bills

Fearless Tower

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How exactly does one file a lien against an aircraft for outstanding debt? We hear a lot about mechanic’s liens, but does it have to be related to maintenance?

Asking for a friend....
 
If you have a judgment against someone and you know the County they register the plane in and you can put a lien on it by filing with the court.
 
For that route yes. You can’t just lien property.
 
How exactly does one file a lien against an aircraft for outstanding debt? We hear a lot about mechanic’s liens, but does it have to be related to maintenance?

Asking for a friend....
You know the saying that possession is 9/10 of the law? This is the situation that it refers to. Most liens on personal property are perfected by possession of the property. There are other means such as filing, but possession is the best of them.

I think that state law on liens applies to aircraft, so if the state where the debt was incurred or where the plane is located allows a lien for whatever the debt represents, the creditor should be able to claim a lien and, possibly, perfect it by filing or by possession of the aircraft. Repairman, storage, purchase money, and other types of liens all have their own rules.

That includes judgment liens founded upon a judgment in civil court. Those are the only type of lien that you can normally get for a debt that doesn’t relate to the property you are trying to encumber with a lien. But there is usually some law that allows some kind of lien against property for debts incurred on account of the property itself.

So here’s what you or your friend needs to do: Figure out what type of lien to claim, then figure out how to claim it and how to perfect it. The best bet would be to talk to a lawyer in your state to guide you through the process. Most lawyers who deal with this type of thing will know the lien laws like the back of their hand so it will be a relatively inexpensive bit of advice to obtain.
 
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@iamtheari has it pretty much right.

Lien rights and lien creation are entirely creations of state law. There is very little uniformity and most self-help liens (not based on a court judgment) I've seen are pretty complicated. The FAA registry comes into play only if the lien is recordable under state law.
 
If you buy a plane in Canada some legal claims are hard to find against the aircraft, not sure once it comes south of the border they are collectable but you might not want to take it back into Canada.
 
It varies by state, in NC you just go to the clerk of court and file the lien. Once that is done the only way to stop the process is for the person who filed the lien to withdraw it or go to court.
 
An actual lawyer can make this clearer, but my layman's understanding is that Mechanic's Liens are an IMPLIED Lien and therefore the easiest to act upon. This is similar to trade liens for any work done on a structure.

Creating a garnishment or asset seizure in a loan default is whole other thing and would require a judgement, or a settlement in lieu of judgement, which needs a filing in a court.

As others have said, it varies by state, and how the debt was created, and hopefully there is a writing that says under which jurisdiction the matter will be resolved.

The bible may have gotten this right: Neither a borrower nor a lender be.

And the old saying: If you have too many friends, loan some money to a few"
 
Thanks all. Sounds like it may be a little too complicated for the specific issue, but could be worth looking into.
 
Another thing worth noting is that liens have different names in different states. "Mechanic's lien" often refers to a lien against land for materials and labor supplied to improve the land. Then some states have renamed that "construction lien" to avoid confusion, but there is a chapter on "mechanic's lien" that is repealed but still in the table of contents just to confuse you. A "repairman's lien" is then the name of the lien that an actual mechanic gets against machinery he works on.

Of course, if the plane is in Virginia, then I'm out of date because I haven't had a license to practice there in a while, but based on my experience studying Virginia law I will say that it is often the state with the most arcane laws. For all I know, the right type of lien to place against an airplane in Virginia is called a "cart-wright's lien."
 
As others have noted, this is 100% an issue of state law. Very generally, mechanic's liens (or artisians liens, or whatever phrase your state uses for them) come in two flavors:

1) recordable liens, and
2) Possessory liens

For recordable liens, frequently there is a form that you simply record/file with a specified government agency (depends on the state or even municipality) that creates the lien. There's usually a time frame for doing so, and the lien may only be valid for a certain period of time. You don't usually need to reduce your claim to a judgment to do this, but you'll likely have to swear under the penalty of perjury that your claim meets the requirements to file a lien. In states with recordable liens, you don't usually need to retain possession of the airplane to keep your lien.

In possessory lien jurisdictions, you typically MUST keep possession of the improved/repaired property in order to have a lien. Once you give it back, you lose your lien rights.

If you're in the repair/maintenance business, it would be extremely beneficial for you to educate yourself on your state's requirements for such liens. A few hundred dollars spent now to have an attorney draft you a short memo on local lien laws as they apply to your business could, in the long term, have a major financial impact on your ability to collect.
 
Why don’t you finish up and explain to him how to foreclose the lien?
 
Why don’t you finish up and explain to him how to foreclose the lien?
LOL!
1. Must obtain Court permission to sell
2. Don't have to obtain court permission to sell.
3. Sell by private sale.
4. Sell by public sale.
5. Sheriff has to do the sale.
6. Sheriff does not have to do the sale.
7. Provide multiple notices to the owner within specific time frames.
8. Provide limited notices to the owner withing loose time frames.

I probably missed a few state variations, but then again, I'm only licensed in three states :D .
 
Why not ask where the plane in question is and provide some info?
 
Because providing actual legal advice, whether free or paid, comes with malpractice risk?
That. But it's more than that. We often do give general information on a subject, but some subjects are more complicated than others. Most state lien laws are trying to walk a line between the storage place or mechanic getting paid and protecting the debtor's rights to his or her property. So they tend to be pretty complicated with lots of traps. As much as I like to do self-help I don't see lien enforcement as a self help situation. This isn't as simple as the FARs.

@Stewartb, you seem interested in how to. Here is North Carolina's personal property lien law.
https://www.ncleg.net/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_44A/Article_1.pdf
 
And to add to the complexity, there can be significant penalties if the lien is improperly filed or foreclosed. Really need to talk to a lawyer that is licensed in the state where the aircraft is located that hopefully has some experience in liens and foreclosures. As a very young attorney, I got involved in a mechanics lien on a Corsair that was used in the filming of a tv show (BA Ba Black Sheep) and while I don’t remember all of the details, the lien was not filed properly and we were able to get the aircraft and the log books back with a court order. Client still owed the money and ended up paying the mechanic once the producers ended up paying the owner and pilot for the flight time.
 
^^^ that story indicates that dude is an OLD attorney. <- just kidding, I liked that show. I watched Pappy in the reruns when I was in high school.
 
“that story indicates that dude is an OLD attorney.” Damn straight skippy - and stay the hell off my lawn
I don’t think 62 is all that old but I guess it depends on your perspective. Based on what I read here, that makes me about middle age . Speaking of young, I teach at a law school and holy cow those students are young!
 
Considering the parts of an plane are worth more than the plane as a whole, good luck collecting a lien.
 
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