Unit 10

Question 1

Lien

Answer 1

Charge or claim against property that is made to enforce the payment of money; encumbrance on the owner’s title

Question 2

Security (Collateral)

Answer 2

something of value that the borrow promises to the lender if the borrower fails to repay the debt

Question 3

Mechanic’s Lien

Answer 3

specific; involuntary; an effort to recover payment for work performed; file lien notice within 4 months of completion and send notice within 10 days. File suit within 2 years

Question 4

Encumbrance

Answer 4

charge or claim that attaches to real property and lessens its value or impairs it’s use. Can transfer since its attached to property. Lien is different because it s financial and attaches because of a debt

Question 5

voluntary lien

Answer 5

intentional; ex mortgage or home equity loan

Question 6

involuntary lien

Answer 6

created by law
statutory - tax lien - created by laws
equitable - created by the court to ensure payment of a judgment by agreement; ex. credit card debt; judgement in a car accident

Question 7

General lien

Answer 7

affects all the property, real and personal, of a debtor

Question 8

lien on real property

Answer 8

attached when filed

Question 9

lien on personal property

Answer 9

when seized or lieved on

Question 10

specific lien

Answer 10

secured by specific property, mortgage loans, tax liens; also secure personal property - car loan

Question 11

Priority of Liens

Answer 11

usually go in recording order. EXCEPT real estate taxes and special assessments generally take priority

Question 12

Subrogation agreements

Answer 12

written agreement to change the priority of the liens

Question 13

Ad Valorem Taxes

Answer 13

REAL ESTATE TAXES. According to value are based on the value of property being taxed. Charged specific, involuntary, statutory
Liens by government or municipalities

Question 14

Exemptions from taxes

Answer 14

municipal organizations (schools, parks etc)
cities and counties
state and federal government
religious and charitable orgs
hospitals
educational institutions

Question 15

IL Property Taxes Adjusted/Exemptions

Answer 15

Owner occupied - homestead exemption $6000
Senior exemption over 65 - $4000
Senior freeze of assessment if income under 55,000
home improvement up to 4 years and $75,000
Other tax concessions

Question 16

Assessment

Answer 16

Generally based on sales price of comparable properties

33% of fair market value except Cook county (which is sliding scale of 10-25%)

Valued by county or township assessor

Question 17

Equalization

Answer 17

assessed values compared with selling prices and then use equalization. Goal to achieve uniformity
Full reassessment every 4 years

Question 18

Budget & Tax Rates

Answer 18

Proposed expenses / total assessed property values = tax rate

Question 19

Appropriation

Answer 19

the way a taxing body actually authorizes. involves adopting an ordinance or law

Question 20

Tax Levy

Answer 20

formal action taken to impose a tax

Question 21

IL Tax Bills

Answer 21

Due 6/1 and 9/1 except Cook County

Penalty is 1.5% per month penalty

Question 22

Enforcement of Tax Liens

Answer 22

delinquent can be collected thru tax sale. 3 types of sales
annual tax sale - redemption period of 2.5 years
forfeiture sale
scavenger sale (after unpaid 2 years/ redemption 6 months)

Question 23

Special Assessment

Answer 23

improvements specific, statutory

Question 24

SSAs

Answer 24

New development, taxing district by ordinance

Question 25

Mortgage lien

Answer 25

Voluntary on real estate

Question 26

lis pendes

Answer 26

notice that lien suit is going to be initiated

Question 27

federal tax lien

Answer 27

specific, involuntary, statutory

Question 28

judgment lien

Answer 28

general, involuntary, equitable