Like a lever, or any of the other simple machines of mechanics, the lien is one of the simple machines of law. A machine because it functions upon ownership and credit, two of the fundamental substances of law. A creditor's lien upon that owned by the debtor secures the credit. This assembly, taken as a unit, forms a security. Because a security may be taken as a unit, it may be traded if there is a market that permits it. This, of course, is true both in the abstract and in fact. Securities, in their variety, multitude, combination and contexts, are the subject of much legal work.
Bankruptcy law concerns itself with the orderly resolution of unsecured credit. This orderliness is the substitute for security. All bankruptcy lawyers - and all good securities lawyers - are bilingual and can deal with the complex mixtures of secured and unsecured credit (including that logically necessary hybrid known as undersecured credit). Yet the two modes are deeply different: secured lending is mechanized at its root. Unsecured credit in its fundamentals involves no legal machine.
They are as different as a cord of wood and a wooden wheel.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment