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Lien Priority refers to the sequence in which various individuals or organizations, who are owed money, receive payment when a property is sold. This order helps determine the order in which creditors are paid, starting with the one with the highest priority, then the second-highest, and so on. When a property owner needs to pay off their debts, lien priority plays a crucial role in determining which creditor gets paid first.
Suppose John has a mortgage on his house, owes property taxes, and owes money to a contractor. If he sells his house, the proceeds from the sale will be used to pay off these debts. Typically, property taxes have the highest lien priority and are paid first, followed by the mortgage, and then the contractor receives payment.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In a town where houses need some care,
Lien priority helps make things fair.
John has debts, oh so many,
Mortgage, taxes, and bills aplenty.
He sells his house to pay what's due,
But who gets paid first, what's the right queue?
Lien priority helps us see,
The order of payment, from A to Z.
First property taxes, it's number one,
Then the mortgage, when that's done.
Last comes the contractor, awaiting his share,
With lien priority, debts are settled with care.