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Mechanic's Lien

A mechanic's lien is a lien filed against your property by someone who has performed work on your house but has not been paid for that work.  If the lien is not removed, your house will go into foreclosure so the person filing the lien can receive compensation.  This kind of situation usually happens when you hire a contractor to do home improvements, pay him in full upfront and then he skips town, failing to pay the people (subcontractors) he hired to actually do the work on your home.   

The best way to avoid this situation is to first not pay any contractor in full upfront for work to be performed.  Pay him instead as the work progresses, and sign a contract with him stating that 20% to 25% of his price will not be paid until the entire job is done.  If the contractor says he needs $5,000 to hire an electrician, give it to him and then get a release from the electrician stating that he has been paid.  In this way, you can be sure the money you are giving to the contractor is actually going to pay the people doing the work on your property.  

If the contractor has skipped town, and a lien has been placed on your property, you may have to pay the subcontractors out of your own pocket to have it removed.   At this point, you will want to consult an attorney to ensure that the lien is indeed removed from your home.  When your home is at risk, don't take chances trying to remove a lien yourself since this can be a complicated area of the law.