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Virginia Creditor's Rights > VA Creditor's Rights > Flashcards

VA Creditor's Rights Flashcards

1
Q

What is Attachment?

A

A lien; a process by which a writ (Writ of Attachment) is issued at the establishment of an action, which in turn commands a sheriff to seize property/effects of D to be held as security for P’s judgment against D (can be against D or holders of D’s property)

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2
Q

What is Seizure?

A

Taking possession of property by legal right or process

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3
Q

What is Levy?

A

Obtaining physical control over property in pursuance of a writ (“to be levied upon”)

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4
Q

Effect of a Levy?

A

Seizure of the property from D is NOT necessary, rather sheriff retains a special interest that enables him to keep the property safe and defend it - if one sells, removes, or encumbers property w/ intent to defeat levy, it is larceny

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5
Q

What is Execution?

A

Judicial enforcement of:
1. Money Judgment, OR
2. Court Order
Which directs sheriff to seize and sell D’s property

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6
Q

VA’s 2 ways to secure or restrict D’s property prior to a judgment so to satisfy any potential claims?

A
  1. Attachment before judgment, OR

2. Detinue

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7
Q

Due Process concerns?

A
  1. Writ cannot be ambiguous
  2. Judge issues writ
  3. P posts bond in case P loses (to indemnify D)
  4. D must be given PROMPT post-seizure hearing to litigate validity of P’s CoA
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8
Q

Difference between Attachment and Detinue?

A

Attachment - a contingent lien on D’s property, which could be unrelated to CoA
Detinue - an action for return of specific chattels

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9
Q

What is necessary for Attachment (before judgment “ABJ)? (FIRST OF TWO REMEDIES)

A
  1. Must strictly follow statutory guidelines
  2. P must have legal or equitable claim against D
  3. P must demonstrate one or more grounds necessary for attachment
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10
Q

VA code lays out 6 grounds for Writ of Attachment

A
  1. D is nonresident of VA w/ property in VA (unconstit.)
  2. D is moving from VA w/ intent to change domicile
  3. D is taking property out of VA so there will NOT be sufficient property to satisfy judgment
  4. D intends to or has converted property into money or securities so to hinder or defraud creditors
  5. D intends to or has disposed of or assign estate so to hinder or defraud creditors
  6. D intends to or has absconded from VA
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11
Q

Where to file Petition of ABJ?

A

File with judge, magistrate, or clerk in county of situs

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12
Q

Jurisdiction of Petition

A

GDC has jurisdiction up to $25,000, but Circuit Court can have jurisdiction of ABJ over $1,000

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13
Q

What MUST be included in Petition?

A
  1. State CoA with sufficient certainty so to give reasonable notice to D of particulars
  2. Allege at least one (of 6) statutory grounds
  3. Set forth specific facts for allegation
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14
Q

Issuance and Execution of Writ

A

If judge finds reasonable cause during ex parte review, he issues attachment, which allows sheriff to levy property

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15
Q

How to serve Writ?

A

Sheriff presents a copy of attachment to the principal D and returns the Writ

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16
Q

Levy on Real Estate

A

If there is a levy on real estate, attachment must state sufficient description of the land so to easily identify it

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17
Q

Seizure of Property

A

Possession can be had if:

  1. P requests seizure in Petition
  2. P has posted bond at least double FMV of property
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18
Q

How to fight Attachment?

A

A Hearing to Quash via motion and notice by D

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19
Q

Grounds for Hearing to Quash

A
  1. Attachment invalid on face
  2. None of grounds for attachment exist, OR
  3. P not likely to succeed on merits
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20
Q

VA Wrongful Attachment

A

Debtor must show:
1. there was a taking
2. lack of good cause
He shall receive compensatory damages for excessive distraint (excess debt + costs), ALSO can receive punitive damages if malice

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21
Q

Detinue in General (SECOND OF TWO REMEDIES)

A

Used when one legally aquired property, BUT who retains w/out right (Can be used Pre-Judgment and/or Post-Judgment)

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22
Q

Who uses Detinue in VA?

A
  1. Chattel Mortgagees (to enforce security interest) or

2. Trustee of Deed of Trust (Debtor refuses to deliver goods)

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23
Q

What to receive after Detinue granted?

A

Either:

  1. D pays the amount of judgment, OR
  2. D surrenders specific property and P sells in conjunction with ARTICLE 9 of UCC (suit if deficiency is allowed)
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24
Q

Seizure w/out Notice to D?

Hearing W/in 30 days of issuance

A
  1. P shows kind, quantity, + value of property
  2. Reasonable cause property will be sold or altered so to defeat P’s claim
  3. Reasonable cause P’s claim has substantial basis
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25
Q

Bond?

A

P must additionally file bond for double FMV

D can have property returned if he does the same

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26
Q

What is Lis Pendens (Memo)?

A

Gives notice to world about suit against real property

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27
Q

Purpose of Lis Pendens?

A

Filed at beginning of suit so to put potential bona fide purchasers on notice so they cannot claim priority

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28
Q

Filing of Lis Pendens?

A
  1. File Memo and Pay Fee in situs

2. State in Memo - title of CoA, purpose of action, court pending in, amount, description of property, + D’s name

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29
Q

Judgment by Decree

A

For one to become “judgment creditor”, he must have:

  1. Decree for Land or Specific Personal Property, OR
  2. Decree requiring Payment of Money, OR
  3. Equitable Order
    i. e. - alimony
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30
Q

Confession of Judgment

A

A statutory device whereby D may waive notice and hearing requirement by appointing agent to “confess judgment” to clerk in event of nonpayment
- D can set aside this judgment w/in 21 days of notice

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31
Q

SoL for Judgment Lien?

A

Within 20 Years of judgment

  • can be extended for 20 more years via timely motion
  • some exceptions: for value 10 yr, against PR 2 yr
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32
Q

Writ of Possession?

A

Necessary following a judgment for recovery of specific property (detinue) so a P can enforce his right of possession (real property)

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33
Q

How to create a Judgment Lien?

A

By docketing the GDC judgment in Circuit Court of city or county of situs.. it gives a RIGHT to LEVY

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34
Q

What is a Fieri Facias (or Writ of Execution)?

A

A lien for personal property so to levy the personalty

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35
Q

How to file Foreign Judgments (non-VA) in VA?

A

File a properly authenticated copy with the Circuit Clerk and pay fee

36
Q

What does Judgment Lien attach to?

A

EVERY interest in land held by D that D has POWER OVER at time of lien and that which is acquired after
- ie if alienated before or in constructive trust, CANNOT touch

37
Q

Priority of Judgment Lien?

A

First to Record

38
Q

How to enforce a lien–Enforcement Suit?

A

Bring suit in Circuit Court of situs where court will demand land sold to satisfy judgment lien (enforcement suit is a comes after judgment lien) OR use rents/profits of land to satisfy if W/IN 5 YEARS

39
Q

What is a Homestead Exemption?

A

A D who is head of a household gets up to $5000 in forgiven debt…if he has not waived in K…thus lien for < or = 5k will be removed
Homestead Deed must be filed in court of situs if real estate

40
Q

Right of Redemption in VA?

A

NO, once action is filed (to set aside title after judicial sale, court must do w/in 12 months)

41
Q

Defenses?

A

Legal ONLY (Equitable do NOT apply)

42
Q

Doctrine of Inverse Alienation?

A

Most recent parcel sold by D to satisfy debt will be used to satisfy, and so on, until satisfied

43
Q

Deed of Trust Priority?

A

Race-Notice, so later party w/out notice has priority. If same property DoT, FIRST in TIME (race)

44
Q

Purchase Money Deed?

A

Highest priority, whether others recorded or not

45
Q

Are you liable for clerk’s mistakes in VA?

A

No

46
Q

Time frame for Writ of Fieri Facias?

A

10 days after GDC judgment OR 21 days after Circuit Court judgment

47
Q

Who issues Writ of Fieri Facias?

A

The clerk, which directs sheriff to levy on D’s personalty

48
Q

How long does sheriff have to Levy?

A

W/in 90 days of receiving writ - if after 90 days, levy is void and could be quashed by D

49
Q

Creating Lien on Personalty?

A
  1. Levy and Seize = actually seized property (bond req.)

2. Levy and Leave = just specifically describes property w/in power to seize

50
Q

Is notice required?

A

No, b/c judgment was notice

51
Q

What personalty can be levied upon?

A
  1. Money
  2. Bank Notes
  3. Tangible Goods
  4. Chattels
52
Q

Does the Household Exemption apply, here?

A

Yes (same as above)

53
Q

When does Priority start?

A

When levied upon (not when sheriff receives writ)

54
Q

How is levy enforced?

A

Sale of personalty (sheriff sets price)

55
Q

How is personalty sold?

A

At a Public Auction, after D given notice via public advertisement

56
Q

Can judgment lien-holder buy at sale?

A

Yes, and usually does; he becomes bona fide purchaser (sheriff cannot buy)

57
Q

Distribution of Proceeds?

A
  1. Admin costs of sale and sheriff fees
  2. Payment of Secured Creditor Liens
  3. Payment of Judgment
  4. Return of excess to D
58
Q

What is Garnishment?

A

3rd Party indebted to D is asked by Creditor to satisfy D’s debt - bank accounts and wages (even if works outside VA)

59
Q

What is a Writ of Garnishment?

A

Judgment Creditor suggests when Fieri Facias is issued so to afford creditor remedy against 3rd Party

60
Q

Garnishment Procedure?

A
  1. Judgment Creditor obtains lien via Writ of Fieri Facias on D’s property held by 3rd Party
  2. Creditor files “suggestion” with same clerk
  3. Specifies amount of interest, if any
    - Priority begins when summons served on 3rd Party
61
Q

What does Clerk do, now?

A

Issues summons, notice, and claim for exemption to 3rd Party and D

62
Q

What does summons need?

A
  1. SSN of D
  2. Total balance due
  3. Follows proper legal procedures
  4. Directed to only one garnishee
    - if any fail, it is void upon 3rd Party objection
63
Q

How many times can summons be issued?

A

Can only be issued on same 3rd Party ONCE in 18 month period, unless prior summons not fully satisfied or other issues with summons

64
Q

Due Process applied to Garnishments?

A

Timely notice to D, hearing w/in reasonable time, and summons has info about possible exemptions/contests

65
Q

How long does Garnishment last?

A

It remains effective until - Order Modifying or Dismissing

66
Q

Exceptions

A
  1. 25% Wage Limitation –60% if for person’s support
  2. Wages of Public Employees - only constitutional EE
  3. Joint Accounts - ie Bank Account
  4. Other 3rd Parties - W/out notice or personal inj.
67
Q

What is a Creditor’s Bill?

A

When Garnishment and Fieri Facias are inappropriate, ie equitable interests at play: in trusts, partnership, etc

68
Q

Pre or Post Judgment Remedy?

A

Post-Judgment Remedy - so Creditor must’ve obtained valid judgment, where Fieri Facias was returned unsatisfied

69
Q

What does Bill need?

A

Bill must set forth specific assets Creditor hopes to reach

70
Q

Fraudulent v. Voluntary Conveyance

A

VA Fraud Conveyance Act = voids gifts, convey, assign, etc intended to hinder/defraud creditor’s right in prop.
Voluntary Conveyance = gift, sale, assign, convey, etc. not based upon consideration is deemed valuable in law

71
Q

VFCA

A

Any Creditor, assignee, successor, may void. Creditor, however, cannot go after Good Faith Purchaser; rather, must attach on original D

72
Q

Proving the Fraud?

A

By Clear and Convincing Evidence, Creditor must show fraud; Courts will employ a vast number of factors to find fraud or even the inference of such

73
Q

Making a Conveyance to Creditor

A

D may make a conveyance to any bona fide Creditor he chooses, so long as no benefit for D

74
Q

SoL for Fraud Conveyance

A

NONE

75
Q

Who may challenge Voluntary Conveyance?

A

Only already-existing creditors, who must attack it so to make conveyance “voidable”

76
Q

Need to show Fraud?

A

No, Creditor need not show fraud, hindrance, etc.; But, exemptions apply and 5 Year SoL

77
Q

Procedure for Conveyance (avoiding one)

A

Creditor can file suit before or after judgment and must bring in necessary parties: D and grantee
File Lis Pendens to put other creditors on notice (still might be subject to other liens)

78
Q

Assignments for Benefit of Creditors

A

Voluntary transfer of D’s assets to another in trust so to immediate liquidate assets and distribute to creditor(s), but must include all of D’s assets–otherwise fraud

79
Q

Deed of Assignment

A

Needs recorded and trustee must mail notice to each creditor named in the deed at least 10 days before sale of assigned property

80
Q

Do all Creditors have to consent?

A

No, but those that do not can file involuntary petition for liquidation under Chapter 7 of Bankruptcy Code

81
Q

Discharge of D and Sureties

A

VA allows assignment to contain discharge clause

82
Q

Does VA allow assignment of wages?

A

Yes, D can assign wages, income, + salary;

  1. Trustee needs appointed
  2. Trustee must give notice to employers
  3. Majority of Creditors must consent
  4. Employer(s) must consent
83
Q

What is required for a mechanic’s lien?

A

Performance of services or furnishing of materials valued at $150 or more for work on property

84
Q

How do you perfect a mechanic’s lien if you are a:

General contractor

Sub-contractor

A

General contractor

File memorandum of mechanic’s lien with clerk’s office in city or county where property is located
Within 90 days of completion or termination of work
Including:
1. Name + Address of owner and Mechanic
2. Amount of lien
3. Description of property
4. Type of materials or service done

Sub-contractor - has priority over general con.

Same as above
Also written notice to owner and general contractor

85
Q

What is the blanket defense to a mechanic’s lien?

A

By not proportioning the lien between different pieces of property, the mechanic will interrupt other creditors

But, Virginia law allows blanket liens if single contract for the work performed

86
Q

What is the one lot defense to a mechanic’s lien?

A

If a mechanic’s lien-holder releases one lot subject to the lien, he is estopped from enforcing the lien against the remaining lots

87
Q

Enforcement

A

Enforcement must occur w/in 60 days of completion of work or 6 months of lien recorded, whichever last; be filed in court of situs; and must contain:

  1. Itemized statement of account
  2. Description of work done
  3. Affidavit verifying such
    - If property is < $3000, holder can sell w/in 10 days of amount due
    - If property is > $3000, he must petition court for sale (GDC if up to $25,000, but Circuit if higher)

Virginia Creditor's Rights (1 decks)

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