Difference between lien and hypothecation
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HYPOTHECATION: This is offering something as collateral for a debt. In hypothecation, the debtor usually does not have to turn over physical custody of the collateral although the lender is "hypothetically" in control of the collateral. A mortgage or car loan would be a good example of this.
LIEN: Is an official claim of debt against something. If you don't pay your property taxes, a lien may be place against the property. The property can not be bought or sold until the lien is paid and satisfied. A mechanic's lien against car repairs is another example.
LIEN: Is an official claim of debt against something. If you don't pay your property taxes, a lien may be place against the property. The property can not be bought or sold until the lien is paid and satisfied. A mechanic's lien against car repairs is another example.
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