Marshaling of Liens Law and Legal Definition

Marshaling of liens is a part of a foreclosure action and involves the process of locating all potential lienholders, notifying them of the foreclosure and determining the validity of liens and the priority of all valid liens. The result of the marshaling of liens is to foreclose all outstanding liens within the same suit, thereby avoiding a series of foreclosures and forced sales. When one lienholder sues to foreclose his, her, or its lien, it is necessary to marshal all liens to: 1) give all lienholders a fair chance to collect at least some of their debts; 2) avoid multiple sales of the property; and 3) help obtain the best price for the property under the circumstances.