The lien is the interest that a creditor or other entity has in specific property, where ownership of the property is evidenced by a legal title document and can also apply to property described in a contract for a loan, where the lender exchanges a lien on the property for the loan, even if the loan was not used to buy the property.
A recording and perfecting of the lien on the title document can prevent the conveyance of a clear title to another, which, in most cases, will prevent the sale of the item.
However, the amount of monetary damages suffered will almost always be an issue, but the court will eventually determine the amount.
Of the three burdens the plaintiff carries, collecting a judgment can be the most difficult, particularly where there are no assets to attach--either because there are no significant assets, or all of the assets are protected by exemptions and other means. Most states provide that a judgment expires after 10 to 20 years. However, judgment creditors rarely continue to pursue the collection of a judgment after an initial attempt fails when they realize that the effort will be fruitless.
There are two primary tests which have been employed in determining whether a person or a company is insolvent. The cash flow test provides that a company is insolvent when it is unable to pay its debts as they fall due.
The important point is whether or not the company pays its debt in carrying on the business.
In addition to shielding your assets when attacked, asset protection planning has another ancillary benefit that serves your goals: the more judgment-proof you make yourself, the less likely it will be that a creditor will bother to pursue a case against you., Or at the least, you may be able to influence a settlement, possibly sooner rather than later.
Bankruptcy law works with the assumption that debtor asset is insufficient to meet the demands of creditors.
In principle, a solvent debtor has every right to effect payments to any of his creditors since in this case there is no race to court room problem.
UNCITRAL guideline to insolvency law define balance sheet test based on excess of liability over assets as an indication of financial distress.
Thus, a payment or transfer of debtor asset with in suspect period will have detrimental effect to the other creditors and hence it is suspect transaction.