Meaning of Encumbrance (What it is, Concept and Definition)

encumbrance is a term from Latin and means a charge, onus. The lien exists when, for example, an asset has not been fully paid off, that has a debt, and is also called financial encumbrance.

Lien is a heavy tax, burden or charge, but it can also be a nuisance and inconvenience. Grave is also synonymous with serious offense, a grievance in something.

In the legal area there is the intention of encumbrance, which is when a financing on a certain vehicle was requested and it has not yet been fully paid off, with a bank or a finance company, or when the vehicle is not correctly documented, the intention of encumbrance remains in the system, until the document remains regularized.

Lien and Detran

When a person buys a vehicle through financing, a lien is entered into the system of the State Department of Transit (Detran), which prevents the transfer of the vehicle to another owner. To make this change, it is necessary to write off the encumbrance in Detran, and this can only be done when the contract is paid. In this way, the owner of the vehicle will not be able to sell it or carry out any other type of sale.

The SNG - National Lien System was created with the purpose of providing greater security to all agencies that effect car financing. SNG prevents fraud through electronic information management and control of restrictions.

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