VA - Creditor's Rights - Judgement Lien, Exemptions, Fraudulent Conveyances, Creditor's Bill

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VA - Creditor's Rights - Judgement Lien, Exemptions, Fraudulent Conveyances, Creditor's Bill
2012-01-16 10:37:07
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VA - Creditor's Rights - Judgement Lien, Exemptions, Fraudulent Conveyances, Creditor's Bill
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  1. Judgment Creditor
    • Judgment creditors have 20 yrs to enforce their CC/federal judgments CC and 10 for GDC judgments (unless the judgment creditor
    • dockets his GDC judgment in CC).
    • JC can extend this time period by filing a motion to extend or by obtaining a new judgment, getting another 20.
    • To domesticate a judgment from another state, JC must register the judgment in the clerk of court’s officer where he seeks to enforce the judgment and notify D of the debtor of the registration in writing.
    • A JC can discover a debtor’s assets by bringing a creditor’s bill in equity if he has a judgment and execution wasn’t satisfied.
    • If debtor fails to answer interrogatories, TJ can issue a capias, taking debtor into custody until he pays, conveys, oranswers the questions
  2. Judgment Liens
    • must use process of execution
    • common factors:
    • 1. must obtain judgment
    • 2. enforcement is by sale
    • 3. notice of public must be complete
    • 4. Effect of obtaining a judgment lien: a) sale & satisfaction - creditor can have debtor's property sold to satisfy judgment b) priority - resolves competing claims on the same property
  3. Judgment Lien on Real Estate
    • docketing - public act
    • attach to all of D’s real estate in the city/county where the lien is docketed, except for D’s security interests in real estate, and automatically attaches to any real estate interest acquired after docketing (floating lien).
    • Priority is determined by the date of docketing, and extending by motion or by suit relates back to the original docketing.
    • continues for 20 years
    • can be extended by motion or new suit
    • If debtor sells the property, JC must file a notice of lis pendens within 10 yrs of recordation of the deed of sale to enforce against the purchaser.
    • Liens on real estate are enforced by bringing a creditor’s suit in equity where the land is located.
    • The court appoints a commissioner who joins all necessary parties, makes any necessary partition, determines priorities, and determines if rents/profits could satisfy the judgment in 5 yrs (if so, sale is not ordered).
    • Real property held in tenancy by entirety is not subject to a judgment lien.
    • Sale cuts off claims junior to the JC’s claim, which is why JCs are necessary parties.
  4. Judgment Lien on Tangible Personal Property
    • created by issuance of a writ of execution (fieri facias) (w/in 21 days from rendition) ordering the sheriff to levy the property within 90 days of writ being delivered to sheriff.
    • They attach to all debtor’s tangible property within the sheriff’s jurisdiction.
    • The sheriff holds a public auction and can’t purchase. But the JC can.
    • First in time: all subsequent purchasers take subject to the lien regardless of notice
  5. Judicial Lien on Intangible Property
    • Judicial liens on intangible property (accounts receivable, garnishment) are created by delivering the writ of execution to the sheriff.
    • They extend to all debtor’s intangible property in Va.
    • Noice must take form of a summons of garnishment
    • First in time is determined by when each writ of execution was delivered to the sheriff.
    • They’re good for 1 yr from the return date on the writ of execution/determination of the amount due from third party.
    • To enforce, JC obtains a summons in garnishment within 90 days of delivery of writ to sheriff, serves the summons to garnishee and debtor.
    • Garnishee admits liability, asserts defenses, or fails to appear.
    • Failure to appear results in default judgment
    • Scope: only extends to intagibles; claim must be determinable amount; negotiable instruments not subject; non-debtor's interest in bank accounts not subject
  6. Exemptions
    • Exemptions to liens: homestead, poor debtor’s,
    • personal injury (?), garnishment, and tenancy by the entirety.
    • All Va residents can claim homestead: any property up to $5000 + $500 x (number of family member) by filing a homestead deed describing the property in the clerk’s office where the real estate is located (for real estate) or where debtor resides (for personal property) any time
    • before the property is sold. Homestead doesn’t apply to purchase money mortgages, spousal/child support obligations, or intentional torts.
    • In addition to homestead, a debtor can claim the poor debtor’s exemption, entitling him to 1,000 worth of clothes; 5,000 in home furnishings; 10,000 in trade tools; 2,000 in motor vehicles; 5,000 in heirlooms; and 5,000 in a burial lot. The exemption protects all sentimental items like wedding rings and pets.
    • The lesser of 25% of a person’s wages or 30x minimum wage can be protected from garnishment
  7. Fraudulent and Voluntary Conveyances
    • Present creditors can avoid a fraudulent (intent presumed for H-W, intra-familial transfers and renunciations of bequests) or voluntary conveyance (sale for less than FMV before or creating insolvency) by making a motion in equity to set aside a conveyance as fraudulent. (GC may attack by billin equity and notice in lis pendens)
    • Future/Subsequent creditors can only upset fraudulent conveyances.
    • But C cannot avoid a fraudulent conveyance if a BFP paid FMV without notice of the fraudulent intent
  8. Creditor's Bill and Interrogatories
    • Purpose: to allow a C to discover nature, location, condition of D's assets; to establish priorities among lien creditors; to distribute proceeds of assets to Cs
    • Procedure: post judgment interrogatories
    • C can't bring creditor's bill in equity unless C has a judgment and execution is issued and returned unsatisfied (nulla bona)
    • Sanctions: D fails to answer, Judge can issue capias (writ requiring D to be taken into custody until proper answers made)