A word about credit risk mitigation

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Liens are Security interests that usually arise by operation of the cold hard facts of life and without the need for any formal documentation. A banker has a lien over your assets. A mechanic has a lien over your car, in that if you don’t pay your bill, you can’t have the car back. A custodian has a lien over your assets. You get the idea.

Liens can be creatures of common law or statute (in which case they’re forms of legal security) or they can be equitable.

to have a legal lien you must have possession over your asset. To have an equitable lien, not so much.