153k views
3 votes
Adam borrowed money to buy a new car. The bank has a lien on the car. What could happen if Adam doesn't make his payments on time.

1 Answer

5 votes

Answer: The bank could sell the car.

Step-by-step explanation:

A lien refers to a claim against an asset which is used as a collateral in order to satisfy a debt.

Since we are informed that Adam borrowed money to buy a new car and that the bank has a lien on the car, in a situation whereby Adam doesn't make his payments on time, the bank can end up selling his car and use the fund to settle the debt that he owes.

User EstebanLM
by
4.2k points