Themis Essay 831 Flashcards
Creditors can upset fraudulent or voluntary transfers made by their debtor, restoring title to the transferred property to the debtor, which
allows the creditor to levy the property and sell it.
Creditors are divided into two categories:
(i) existing creditors, who have liquidated their claims against the debtor by agreement (e.g., article 9 security interests or mortgages) or judgment at the time of the challenged transfer; and
(ii) future creditors, who obtain or reduce their claims to judgment after the challenged transfer.
Existing creditors may challenge either
fraudulent or voluntary conveyances made for less than fair market value.
Future creditors may only challenge
transfers made with the intent to defraud.
As a general rule, a gift, conveyance, assignment, or transfer of real or personal property that is intended to defraud creditors may be
set aside.
A conveyance, assignment, or transfer of real or personal property made for less than fair market value may be
set aside by existing creditors.
A creditor may bring an action to set aside a conveyance even before
obtaining a judgment lien.
The filing of an action by a creditor creates a
lien against the transferred property.
Existing judgment creditors may file suit to
set aside voluntary transfers as well as fraudulent conveyances.
The transferee (grantee) is a necessary party to be joined in actions to
set aside a conveyance or place a lien on transferred property.
A lis pendens is a public act that allows
a lien of attachment to be effective against a bona fide purchaser.
A lien attaches on property of a third-party when the third-party is named as a co-defendant and
served with a copy of the attachment.
Normally, a preferential transfer to a creditor that satisfies an existing debt is
not fraudulent.
When the debtor controls the creditor entity, the debtor cannot
convey property to satisfy its own debt before the debts of other creditors.
The writ of fieri facias commands the sheriff to
find the debtor’s property, seize it, and sell it to satisfy the judgment.
The writ of fieri facias is used to execute on
all forms of personal property that can be described as chattel and that are not exempt.
A lien attaches upon
levy.
A proper levy occurs when the property is
subject to the “power and view” of the sheriff.
If any person has a claim, legal or equitable, to damages for breach of any contract, she may
sue for an attachment of the debtor’s property.
It is sufficient grounds for an action for pre-trial levy, seizure, or attachment if the debtor:
(i) is a foreign corporation;
(ii) is removing or about to change his domicile;
(iii) is removing or intending to remove his property out of Virginia;
(iv) is converting or about to convert his property into money, securities, or evidences of debt with the intent of hindering his creditors;
(v) has assigned or disposed of or is about to assign or dispose of his estate; or
(vi) has absconded or is about to abscond with his property.
Before seeking attachment of the property, the plaintiff must
post a bond, after which the lien attaches to the defendant’s tangible personal property in his possession when the sheriff makes a proper levy.
With every attachment against specific personal property, the sheriff must
attach the specific property claimed in the petition, and as much as necessary of the defendant’s real and personal property as necessary to cover the damages for the detention of the specific property sued for and the costs of the attachment.
