Dec 05, 2013 10:37 AM

Re: The value of the lien:

Think of it like a mechanic's lien/builder's lien:

A mechanic does $1000.00 worth of work on a $10 000.00 car. The lien is for $1000.00, not the value of the entire car, but it controls the entire car until the lien is removed/paid/discharged.

The mechanic has no right to lien $10 000.00, ONLY the amount of the work done.

The lien goes into the asset column of his company as $1000.00 (even though the lien controls $10 000.00 in value).

Same for a mortgage...the charge against the property, held by the mortgage company/registered with the titles office, is for the value of the 'loan', NOT the value of the house, but until the loan is paid, they control the entire house/value.

You can only lien what you can justify, not some pulled out of your arse value.

With the house mortgage example:

Mortgage is $30 000.00, house value when sold is $100 000.00...$30 000.00 goes to the mortgage company (the value they can legitimately claim), you keep the other $70 000.00...but until the mortgage is paid, the mortgage company keeps control of the entire $100 000.00 asset, but can ONLY list in their asset column the value that they have legitimate claim to ($30 000.00), as a secured creditor.

To take the example further:

You have debts of $120 000.00 owing on your estate (unfortunately you just died)...

The assets are sold for $100 000.00.

The mortgage company, being a secured creditor take the first $30 000.00 & the unsecured creditors fight over the remainder, but in total, $20 000.00 is left unaccounted for & ultimately gets written off by the remaining unsecured creditors.

Same goes for the CRF:

If 1 million men lien the person for $1 million each (because that is what you can realistically claim/lien into your corporation as an asset...because your working life becomes the corporation's asset), totalling $1 billion, and the CRF only has $2 billion, well the remaining men/women, now being unsecured creditors fight over the scraps (their piece of the total pie just got a lot smaller).

This is why you may want to factor in inflation into your claim/lien, to keep control of the lien if/when the government allow the currency to be printed into oblivion (& a loaf of bread becomes worth $1 million).

From an accountant's point of view, a perfected lien's value is its face value because once perfected, it is now a specie of money.

The perfected lien is now regarded as a security, with a certain value: THAT is the value that is inserted into the asset column.

If you don't want to pay for a corporate audit, keep it realistic, because it's a bit ridiculous having a new company all of a sudden worth $100 million in it's first year of trading...might raise a few eyebrows.

To find an accountant: Find one that works with mortgage companies because all he is doing is putting the mortgages/liens in the asset column of the mortgage company as book value/money of account. That may help Chris Evan

It's what you negotiate that book value for in the open market (banks, investment houses etc) that establishes its tradeable value...

eg: lien for $1 million, negotiated with a bank...bank agrees to lend $100 000.00 against the book value of the lien (bank is acting as a currency exchange & the exchange rate is 10 cents on the face value of your specie of money), then the 'money of exchange' value just became $100 000.00, not $1 million....same as when you exchange 10 hryvna (Ukraine) for 1 euro...you may be worth a million in Ukraine, but only $100k in Europe...(just as you may be worth 20 gazillion in your private corporation but fuckall on the streets...so don't cash it in & find out, just keep control of it via the lien...own nothing, control everything).

So the tradeable value = $100 000.00.

As Scott says...the problem is realising that you have no value...the bank may offer $1000.00 in exchange for a $1 million lien...

but a $100k lien against a cop (in his private capacity), for aiding and abetting the kidnap of a child for example, may be worth $50k, or even $80k to his pissed off ex wife...after all, it's all just business, contracts & negotiations at the end of the day ;-)