Creditors Rights

Question 1

Usually a party cannot be held liable on a negotiable instrument unless

Answer 1

bears her signature or the signature of an authorized representative. §8.3A-401.

Question 2

Exception to the rule that a spouse shall not be responsible for the other spouse’s contract or tort liability to a third party, whether such liability arose before or after the marriage?

Answer 2

The doctrine of necessities. Code of VA § 55.1-202. The necessaries doctrine holds that a spouse is responsible for necessary goods and services furnished by their spouse by a third party.

Question 3

When the account is in joint tenancy with the right of survivorship, (not tenancy by the entirety) and a creditor of one of the owners, who is the judgment debtor, can reach what share of the account?

Answer 3

The debtor’s share of the account.

Question 4

There is a presumption that when an account

is owned by a husband and wife, they own it

Answer 4

equally.

Question 5

How does garnishment work?

Answer 5

After 21 days had run from the date of the entry of any judgment order [Rule 1:1] the creditor should file a Suggestion in Garnishment, that requests the Clerk’s Office of the court where the judgment was entered, to issue a writ of execution
and garnishment on the party’s/parties’ bank account to reach the judgment debtors’ shares in the bank account.

Wages can be taken (i.e., garnished) but only for the lesser of:

1. 25 percent of wages; or
2. Excess of 40 times the federal hourly minimum wage.

Question 6

How does a homestead exemption work?

Answer 6

Everyone gets what’s called a homestead exemption. It consists of:

1. $5,000 plus $500 per dependent
2. Folks over 65 years old get $10,000.
3. $25,000 for real or personal property used as the principal residence of the claimant or claimant’s dependents.
4. You claim it by filing a “homestead deed” with clerk of county where real property is located, or where the claimant resides for personal property (but not necessary if claimed as exempt in a bankruptcy case). Can file after a judgment lien attaches. Cool!

Question 7

Mechanic lienors pursuant to Va. Code §43-33 have priority

Answer 7

priority up to $1,000.

https://law.lis.virginia.gov/vacode/title43/chapter4/section43-33/