Legal Question in Administrative Law in California

Re: California Sale of Liquor License

Neither banks nor any other private person or entity can "put a lien" on your property against your will. The only exception is a mechanic's lien, which can be placed by someone providing labor, materials or equipment for a work of improvement to real property, and this right is given by a provision in the California Constitution.

Liens arise because (a) the owner of the property gave a security interest by some voluntary act; (b) a court has rendered judgment or entered some kind of order against you; or (c) you owe taxes.

I'm not clear on what you mean by "neglect the loan" and "(bankruptcy)," but maybe you mean you are thinking of a voluntary bankruptcy filing to get out from under the loan. If so, I'd strongly recommend that you have an in-person discussion with a bankruptcy lawyer near you, and raise the following questions: Do you qualify for a Ch. 13? Is the bank loan recourse or non-recourse? Is the liquor license transfer a "preference" and is it within the trustee's reach-back period to avoid it?

I think you also need to discuss whether the liquor license is subject to any special ABC requirements as to transfers where bankruptcy issues also arise. I have heard that there may be special rules for liquor licenses.