Creditors' Rights

Question 1

What are questions to ask on a creditors rights question

Answer 1

What kind of creditor are they, what kind of property is at issue

Question 2

General/Unsecured Creditors

Answer 2

Do not have any lien, only recourse is against the debtor.

Question 3

Lien/Secured Creditor

Answer 3

Rights against the debtor and their property.

Question 4

Define deed of trust

Answer 4

Consensual lien in real property

Question 5

Can a tenant in the entirety encumber the property

Answer 5

No, creditor cannot reach tenancy in the entirety if they only have a claim against one tenantW

Question 6

What are examples of judicial liens

Answer 6

Garnishment, execution, attachment

Question 7

What is an attachment lien

Answer 7

Arise in the middle of a lawsuit, before judgment. Prevent debtor from disposing of property before judgment. Extraordinary remedy, raises due process concerns

Question 8

When might an attachment lien be appropriate

Answer 8

Debtor is a foreign corp or out of state resident, removing his/her property from VA, converting property to other forms to delay/defraud creditors, transferred/assigned property to others

Question 9

Procedure for attachment

Answer 9

File petition (describe claim, amount, statutory ground), post bond, memorandum of attachment or lease pendence in circuit where property is located

Question 10

Distress for right

Answer 10

Pre-judgment lien for landlords. Goods on leased premises or goods removed within the last 30 days. Cannot be for rent from for more than 4 years ago. Gives priority over Art. 9 creditors. Must post a bond.

Question 11

How long do judgments last

Answer 11

CC - 20 years, GDC - 10 years

Question 12

How to get out of state judgments enforce

Answer 12

Uniform Foreign Judgment Act

Question 13

How long to enforce judgment lien

Answer 13

10 years

Question 14

How do you enforce

Answer 14

(1) fill a bill in equity to enforce through sale (2) appoint commissioner

Question 15

What is an execution lien

Answer 15

A lien on tangible personal property

Question 16

What is the waiting period for an execution lien

Answer 16

CC - 21 days, GDC - none

Question 17

What is a garnishment lien

Answer 17

Lien on intangible goods (wages, bank accounts)

Question 18

Procedure for garnishment

Answer 18

(1) writ of execution asking for garnishment summons - must name garnishee directly

Question 19

Limitations on Garnishment

Answer 19

Government style benefits are generally exempt - child support, disability, veteran benefits. Cannot access jointly owned marital account

Question 20

When must the sheriff levy property after the issuance of a writ of execution

Answer 20

90 days

Question 21

Exemptions

Answer 21

Family bible, engagement rings, heirlooms, clothing up to $1000, furniture up to $5000, car up to $6000, $5000 wild card exemption ($10,000 if 65+ yo), 40x minimum wage, 75% of wages are protected

Question 22

Procedure for exemption

Answer 22

File a homestead deed. Do not apply to child support, consensual liens.

Question 23

Fraudulent conveyances

Answer 23

Generally cannot get at property in third parties unless it is a fraudulent conveyance.

Question 24

Questions for fraudulent conveyances

Answer 24

(1) intentional fraudulent conveyance: meant with intent to defraud creditors, burden is on creditor (2) constructive fraudulent conveyance

Question 25

Evidence of fraud

Answer 25

Still using the property, sells for nominal amount, debtor is insolvent

Question 26

Elements of constructive fraud

Answer 26

(1) less than fair value (2) insolvent at time of transfer or directly after

Question 27

Who can sue for constructive fraud

Answer 27

Only current creditors

Question 28

GFPV rights

Answer 28

The transferee is protected, regardless of whether the conveyance was fraudulent

Question 29

GFP for less than fair value

Answer 29

The property can be taken from them, but the purchaser is entitled to the amount paid and, in effect, will have a lien on the property for that amount

Question 30

What can subcontractors obtain under a mechanics lien

Answer 30

Their recovery is limited to the amount that the owner still owes to the general contractor at the time the owner is notified of the subcontractor’s lien

Question 31

What is required to perfect a mechanic’s lien

Answer 31

(1) memo of lien in the clerk’s office no later than 90 days from the end of the month in which the general contractor or subcontractor last performed (2) certify that the memo is accurate (3) send a copy of the memo to the owner.