Pre-Judgment Attachment: Get It Before It Vanishes

Unfortunately, filing a lawsuit to collect a debt is often an encouragement to the debtor to move and conceal assets. This sometimes makes creditors hesitant to take early legal action. But, Virginia law has a solution: the pre-judgment attachment. Virginia law allows a creditor to bring the debtor's property into court custody at the outset of a lawsuit, thereby assuring that the property will be available to satisfy any judgment the court eventually grants.

Virtually any significant asset of a debtor can be subjected to attachment. Although real estate and business equipment are the most popular targets, a creditor can also attach bank accounts or even other monies owed to the debtor by a third party. One useful application of pre-judgment attachment occurs in construction cases, when a sub-contractor attaches payments to an out-of-state general contractor. An interesting case is the attachment of an elephant from a traveling circus; unfortunately, the creditor neglected to compute the cost of feeding the animal before taking this ill-advised action.

To secure a pre-judgment attachment the plaintiff files a sworn petition setting forth the cause of action and the grounds for the attachment. The justifications for attachment must fall within one or more of the categories allowed by Virginia Code Section 8.01-534. If the petition is approved by a judge, the creditor must post a bond of twice the amount of the claim. Upon posting of the bond a warrant will be issued ordering the sheriff to seize the property and bring it into the custody of the court. Generally, the debtor will request a hearing within twenty-one (21) days of the seizure at which time the court will determine whether the property will be released or remain in custody until the lawsuit is completed. Many attachments are dismissed at that hearing because of failure to comply with the technical requirements of Virginia attachment procedure.

Pre-judgment attachments do involve certain risks to the creditor. The bond is posted in order to compensate debtors for the improper seizure of their assets. Therefore, creditors should not use attachments for questionable claims. Nevertheless, the judicious utilization of this legal tool can be the difference between an empty judgment and a collected judgment.

Grounds for Attachment:

In summary form, it is sufficient grounds for attachment that the defendant:

* Is a nonresident corporation or individual, which has assets or debts owed to it in Virginia

* Is removing or about to remove out of the Commonwealth with intent to change domicile

* Intends to remove, or is removing, or has removed the specific property sued for or his assets or the proceeds of the sale of his property out of the Commonwealth so that the debtor will not have therein assets sufficient to satisfy the judgment

* Is converting, is about to convert or has converted his property into money, securities or debt with the intent to hinder, delay or defraud creditors

* Has assigned or disposed of or is about to assign or dispose of his assets with intent to hinder, delay or defraud creditors

* Has absconded or is about to abscond from the Commonwealth or has concealed himself to the injury of his creditors, or is a fugitive from justice.

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The above is not meant to replace legal counsel. To speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out one of our information request forms.

Reasonable Attorney's Fee?

Unless there is an agreement providing for attorney's fees, a Virginia court will not award attorney's fees for breach of contract or failure to pay on an open account. While most companies are aware of this problem and put attorney fee provisions in their supply contracts or promissory notes, there is still a problem. If these agreements provide for "reasonable attorney's fees", then the court may want proof of the amount the litigation actually cost (sometimes by expert witnesses) and often awards less than the contingency fee, the actual cost, and the cost it will take to collect the judgment. If the agreement states a fixed percentage such as "25%" or "1/3", the court may decide that it did not take that much effort to obtain the judgment and award less than the amount that the client will be forced to pay the attorney out of collection. Furthermore, if the debtor defaults on a confession of judgment note, the clerk of court who enters the confessed judgment will not determine the amount to be awarded under a "reasonable attorney" fee clause.

The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, please contact them by calling 703-273-1400 or by filling out their online information request form.

Important Eviction Deadlines

During a commercial eviction procedure there are important deadlines that landlord must meet in order to successfully evict a tenant. Some of them are as follows:

Notice of Default
There are no 5 day statutory notice requirements as in residential evictions. However, all notices required by the lease must be satisfied before filing the Unlawful Detainer.

Service of Unlawful Detainer
Must be made 5 days prior to first return date.

Removal
Tenant may seek to remove the case to the Circuit Court but must do so within 10 days after the first return date. If this occurs, be sure to demand that the tenant post a bond for future rent.

Appeal
If either tenant or landlord wants to appeal the General District Court trial verdict, a notice of appeal must be filed within 10 days; or, 30 days from a Circuit Court judgment.

Writ of Possession
If the court awards possession to the landlord, the Writ of Possession can be filed after 10 days. But, many clerks of court will not issue a Writ of Possession after 60 days.

Sheriff's Return
The sheriff must evict the tenant or return the writ of possession to the court without eviction within 30 days. Don't delay or Landlord may have to start the eviction all over again.

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The above is not meant to replace legal counsel. If you'd like to speak to one of the attorneys at Gross & Romanick, call 703-273-1400 or fill out their online Information Request form.