Some creditors—such as home mortgage lenders and automobile lenders—require the borrower/debtor to secure or collateralize the loan with the property being purchased. If the debtor defaults and fails to timely make the payments on the loan, this type of secured loan agreement allows the lender to foreclose on or seize the property (real estate or automobile) and sell it to repay the loan. In other words, in the loan agreement, the debtor voluntarily gives the creditor a lien on the property (a voluntary lien).

But many creditors are unsecured creditors—meaning their agreement with the debtor does not expressly provide for a lien on any property to secure payment of the debt. These creditors must generally file a lawsuit and secure a judgment against the debtor—or follow other processes prescribed by law—in order to place a lien on any of the debtor’s property, such that the creditor can force the sale of the property to satisfy the lien. Such a lien is broadly known as an involuntary lien.

Credit card companies, utility companies, cellular phone service providers, and hospitals who provide medical services are examples of unsecured creditors whose extensions of credit are not secured by a voluntary lien, but who may be able to secure an involuntary lien.

Similarly, governmental entities—such as counties that assess property taxes and the Internal Revenue Service (IRS) that collects federal income taxes—may place involuntary liens on property to satisfy tax obligations.

Contractors who provide labor or materials to improve real estate (home construction or remodeling)—and auto mechanics who service and repair automobiles—may file an involuntary mechanic’s and materialman’s lien to secure payment for the materials and labor.

And in some states, a parent, current or former spouse, or the state may place involuntary liens on property to secure payment of child support obligations or marital property obligations.

In Montana, secured creditors, such as mortgage and auto loan lenders, have the right to foreclose or repossess the property if the debtor defaults on the loan, as these loans are backed by collateral through a voluntary lien. Unsecured creditors, on the other hand, do not have an initial claim on the debtor's property to guarantee repayment. If an unsecured creditor, like credit card companies or hospitals, wants to collect on a debt, they typically must file a lawsuit, obtain a judgment, and then may be able to place an involuntary lien on the debtor's property. This lien can potentially lead to the forced sale of the property to satisfy the debt. Government entities can also impose involuntary liens for unpaid taxes, such as property taxes or federal income taxes. Additionally, contractors and auto mechanics can file mechanic's and materialman's liens for unpaid labor or materials provided. In Montana, involuntary liens can also be used to secure payment of child support or marital property obligations. These processes are governed by state statutes and federal law, and the specific procedures and rights of creditors and debtors can vary depending on the type of debt and the nature of the lien.