Disputes among people or companies about who owes what to whom sometimes descend into dragged-out conflicts that require a judge to sort through them. In some cases, a person who has the means but not the willingness to pay a valid debt disregards even the court's judgment, prompting the creditor to file a lien against the debtor's assets. The lien prevents the sale or transfer of property like a house, car or boat. With a lien in place, before a title can transfer to a new owner, all outstanding liens must be paid in full. When placing a lien on a boat, you must first identify whether it's registered as a vehicle by the state, or documented as a vessel by the United States Coast Guard.
Boats Registered as a Vehicle
File a lawsuit. A court judgment must accompany the paperwork authorizing the lien. If the judge rules in your favor, the court issues a judgment of debt that you can use to pursue more aggressive collection activities -- including boat liens.
Visit the county courthouse in the jurisdiction in which the debtor makes his primary residence, or visit a branch office of the state's department of motor vehicles. Boats registered like a vehicle are governed under state law. Usually, boats of 16 to 25 feet in length are registered as vehicles and issued titles, but each state sets own requirements about boat registration and titling. In Kentucky, for example, all liens are placed at the clerk's office in the county where the debtor resides, whereas in Michigan, title-related documents (including liens) are recorded at secretary of state branch offices.
Complete a lien document and submit it to the county clerk or state department of motor vehicles. Each state has its own forms. A filing fee is often required. A copy of the judgment must usually be included with the paperwork.
Boats Registered as a Vessel
File a lawsuit. A court judgment must support the paperwork authorizing the lien.
Prepare a notice of lien to the United States Coast Guard's National Vessel Documentation Center. The NVDC records all boats longer than 25 feet or for which the owner seeks documentation instead of state registration.
Draft a certified letter indicating the boat's name, number, the names of each lien claimant, the nature of the lien, the date of debt judgment and the total amount owed.
Send the lien notice to the National Vessel Documentation Center, U.S. Coast Guard, 792 T J Jackson Drive, Falling Waters WV, 25419.
Send a copy of the lien notice to the vessel's owner and all other secured parties on the title. Identify the parties through the National Vessel Documentation Center.
In many states, if a person fixes or retrofits a boat but the owner refuses to pay for the goods or services rendered, the tradesman can file a "mechanic's lien" against the boat. These often don't require a court judgment; however, the process varies by state, so check with an lawyer in your state to see if you are eligible to file a mechanic's lien.
Liens don't guarantee repayment. The boat owner can simply refuse to sell the boat, or if there are other liens (like a financing company) that have priority, you may not see the debt paid even if the boat is sold at auction.
- U.S. Coast Guard: National Vessel Documentation Center -- Instruction
- Commonwealth of Kentucky -- Logan County Clerk: Liens
- Michigan Department of State: Watercraft
- MarineTitle.com: State Titling vs. Vessel Documentation
- Internal Revenue Service. "Understanding a Federal Tax Lien." Accessed Sep. 18, 2020.
- Experian. "Tax Liens Are No Longer a Part of Credit Reports." Accessed Sept. 18, 2020.
- Experian. "What Affects Your Credit Scores?" Accessed Sep. 18, 2020.
- Federal Trade Commission. "Fair Credit Reporting Act 15 U.S.C § 1681," Page 22. Accessed Sep. 18, 2020.
- In many states, if a person fixes or retrofits a boat but the owner refuses to pay for the goods or services rendered, the tradesman can file a "mechanic's lien" against the boat. These often don't require a court judgment; however, the process varies by state, so check with an lawyer in your state to see if you are eligible to file a mechanic's lien.
- Liens don't guarantee repayment. The boat owner can simply refuse to sell the boat, or if there are other liens (like a financing company) that have priority, you may not see the debt paid even if the boat is sold at auction.
Jason Gillikin is a copy editor and writer who specializes in health care, finance and consumer technology. His various degrees in the liberal arts have helped him craft narratives within corporate white papers, novellas and even encyclopedias.