Kentucky Subordination of Lien: A Detailed Description and Types In the state of Kentucky, a subordination of lien refers to a legal document that allows a creditor or lien holder to modify the priority of their lien or claim on a property. This modification generally involves the creditor agreeing to subordinate their lien position to another lender or creditor who holds a higher-priority lien. By doing so, the creditor relinquishes their right to collect any proceeds from the property until the higher-priority lien is satisfied in case of foreclosure or sale. Keywords: Kentucky, subordination of lien, legal document, creditor, lien holder, modify, priority, claim, property, lien position, higher-priority, foreclosure, sale. There are a few different types of Kentucky Subordination of Lien: 1. First Lien Subordination: This occurs when a lien holder who possesses a first lien, typically a mortgage, agrees to subordinate their lien position to an additional loan or lien. These agreements often occur when a homeowner wishes to refinance their mortgage while keeping the original first mortgage intact. 2. Second Lien Subordination: In this type, a lien holder with a second lien position on a property agrees to subordinate their lien to a third-party lien. Second lien subordination commonly takes place when a borrower needs to obtain additional financing, such as a home equity loan or line of credit, but the lender requires the second lien to be subordinate to the new loan. 3. Intercreditor Subordination: Intercreditor subordination agreements involve multiple creditors agreeing on their respective rights and priority of claims against a debtor's property. These agreements are often used in complex commercial transactions where multiple lenders provide separate loans secured by various assets of a borrower. Intercreditor subordination establish the order in which the different liens or claims will be paid if the borrower defaults. 4. Subordination of Mechanics' Lien: A mechanics' lien is a legal claim filed by contractors or subcontractors to secure payment for labor or materials provided for a construction project. Sometimes, a mechanics' lien filed against a property can interfere with financing or refinancing options. In such cases, the lien holder may agree to subordinate their lien to allow for the completion of financing, provided certain conditions are met. Overall, Kentucky subordination of lien allows for flexibility in property financing by allowing creditors to modify their lien priority. It is crucial for all parties involved to carefully review and understand the terms of the subordination agreement before entering into such arrangements. Disclaimer: This content is for informational purposes only and should not be considered legal advice. For a comprehensive understanding of Kentucky subordination of lien or to draft an agreement, consulting with a qualified attorney is recommended.
Kentucky Subordination of Lien
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To apply for a lien subordination, file Form 14134 (Application for Certificate of Subordination of Federal Tax Lien). If you're trying to take out a loan, you must file this form at least 45 days before the loan settlement meeting.
The IRS will issue you a Certificate of Subordination. It permits a junior creditor to move ahead of the IRS tax lien in priority. However, the IRS tax lien remains in place on this priority.
Q: What forms do you accept to release a lien? A: The Kentucky County Clerk's Association voted to only accept one of the following forms to release vehicle liens: Original Clerk's Filing Receipt, Title Lien Statement (Form TC96-187), or a UCC-3 Financing Statement Amendment.
First, you must fill out the IRS form 14134, Application for Certificate of Subordination of Federal Tax Lien. To complete the form, you will need to decide between two options for subordination: Pay the IRS an amount equal to the lien or interest they are subordinating.
Discharge means the IRS removes the lien from property so that it may transfer to the new owner free of the lien. Use Form 14135. Subordination means the IRS gives another creditor the right to be paid before the tax lien is paid. Use Form 14134.
??Lien Subordination occurs when the Department of Revenue allows its lien to take a lower priority than someone else's lien. Lien Subordination is made at the discretion of the Department of Revenue.
The IRS will issue you a Certificate of Subordination. It permits a junior creditor to move ahead of the IRS tax lien in priority. However, the IRS tax lien remains in place on this priority.
