People reviewing charts and discussing auto continuation of liens
ComplianceFinanceOctober 26, 2017

Auto Continuation: A winning lien management play

All liens expire.  Liens can be continued with a continuation.  Failure to continue a lien means the asset is no longer secured. Learn more about Auto Continuation.

In football, a player that can help his team win through running, receiving, and kick returning is called a “triple threat” and is highly sought after. The lending world has a powerful and equally valuable equivalent, something that can help companies successfully manage liens, increase efficiency, and reduce risk. This lending world equivalent is available now and can prove to be a winning pick in the daily game against expiring liens.

All liens have a limited shelf-life. After five years, the lien expires unless renewed. Should a debtor encounter financial difficulty and be forced to file bankruptcy, the court is under no obligation to honor an expired lien. Such a lien could therefore be declared not perfected and thus invalid. As a result, the lender would lose its secured standing and be moved to the back of the line of creditors. That could mean the lender would recover little or nothing in settlement.

Lenders need a way to monitor and manage their lien portfolios so they will know which outstanding liens are in danger of expiring and need to be renewed to stay in force. Keeping track of these liens can be a costly, labor-intensive process, one that some organizations may not have the resources for.

The good news is there is an alternative solution called Auto Continuation. This automated system issues alerts about soon-to-expire liens so that timely, proper action can be taken, either by the system, or in certain cases, manually. The results are more accurate lien management, a more efficient perfection process and reduced risk as no liens will slip through and expire.

Alexis Jacobson Taylor is Associate Product Marketing Manager for Wolters Kluwer Lien Solutions. Taylor's responsibilities include leading efforts to market the company’s core product line to customers and prospects. She works closely with customers and explores ways to refine Lien Solutions products to better market the company’s offerings.