Possessory Lien

Here at Ruby’s Rockin’ Pawn Shop, we’re all about the possessory lien. A “possessory lien” happens when a creditor extends a loan to someone and retains possession of the loan’s collateral.

In our business, possessory liens work like so: someone comes into the shop in need of money. They’ve got an old watch no one wants, so in exchange for the money they need, they give us the watch. If they come back with enough money within a certain period of time, they can buy the watch back. If they don’t, the watch is ours. We can keep it or we can sell it.

We also see possessory liens in other lines of business, like storage unit rentals. Let’s say we rent a 9x6 storage unit down at Storage Steve’s, and we fill it with all of the high school memorabilia that was taking up too much space in the garage, but that we just can’t seem to part with. When we sign the rental agreement for the unit, it’ll usually specify that if we stop paying rent for a certain amount of time—usually somewhere in the neighborhood of three to six months in a row—then the storage unit company can take possession of our unit and everything in it, and they can sell it to try and recoup what we owe them in rent. (Ever seen Storage Wars? This is what happens pre-auction.) We’re not sure how much they’ll be able to get for our high school bowling trophies and that moth-eaten prom dress, but that’s beside the point. The point is that, if we don’t pay our rent, then Storage Steve could find himself with a possessory lien on our precious high school memories.