Creditor's Rights Va V1

Front 1

What are general creditors?

Back 1

Creditors that have no lien of any type

Front 2

What are lien creditors?

Back 2

Creditors who possess an interest in some specific property of the debtor

Front 3

What are the 3 types of lien creditors?

Back 3

1) statutory lien creditor: c'or who obtains a lien on d'or's property by virtue if a statute (e.g., 2 types of mechanic's liens)
2) Judicial lien creditor: C who obtains a lien on D's property by use of legal process (typically through execution)
3) Consensual lien creditor: C who obtains a lien on D's property by virtue of D's CONSENT (e.g., mortgages, Art 9 security interests)
3)

Front 4

What is a mechanic's lien and when does it attach?

Back 4

-It is a lien that attaches by operation of law when a contract is made and work is done, or materials furnished, to enhance the value of property
-Use of materials furnished and labor extended creates the lien

Front 5

What are the two types of mechanic's liens?

Back 5

1) Mechanic's lien on personal property: person who improves or repairs personal property at the request of owner has a lien on that property until paid (need not be a mechanic)
2) Mechanic's and materialman's lien on real property: all persons who perform repair, construction, or improvement of any bldg/permanent structure have a mechanic's lien thereon for the value of their services

Front 6

What are the 2 ways a mechanic's lien on personal property are created? Are there any limits?

Back 6

1) at owner's request (limited to "just and reasonable charges)
2) at request of non-owner in lawful possession (e.g., car lessee) limited to $625

Front 7

What are the two types of ways that a mechanic's lien on personal property is enforced?

Back 7

1) Self-help sale (ONLY if property that doesn't exceed $5000 in value)
2) Sheriff's sale (if property > $5000)

Front 8

What is a self-help sale? What steps must be followed in a self-help sale?

Back 8

-One way of enforcing a mechanic's lien on personal property
---Steps---
1) If lien debt is not paid within 10 days after it's due, AND
2) Value of property affected by lien doesn't exceed $5000, THEN
3) the lienor (repairer) may sell the property at public auction (but must publicly advertise the time, place, and terms)

Front 9

What is a sheriff's sale and what steps must be followed to effectuate?

Back 9

-Another way of enforcing a mechanic's lien on personal property
---Steps---
1) If value of property is more than $5000 but doesn't exceed $15,000, may petition GDC of county/city where property located and court will order sheriff to sell
2) If value exceeds $15,000, party w/ lien may petition Circuit Court of county/city where property is located and court will order sheriff to sell
3) In both cases C must give notice to D

Front 10

Who is elegible for a mechanic's or materialman's lien on real property?

Back 10

-All persons performing labor or furnishing materials for construction, removal, repair, or improvement of any building or permanent structure (incl. bldgs and land)
--Specifically--
1) General contractor (direct contract w/ owner; can be multiple on one project)
2) Subcontractor (contract w/ GC not owner)
3) Sub-subcontractor (contract w/ subcontractor not owner or GC)

Front 11

Generall, how is a mechanic's or materialman's lien on real property created?

Back 11

-A lien is not enforceable until it has been perfected (see perfection details in other card)

Front 12

What specifically must a general contractor do to perfect a mechanic's/materialman's lien on real property?

Back 12

1) File a memorandum of mechanic's lien in clerk's office within:
90 days of the completion of work (or from when work is terminated)
2) Memorandum must set forth:
a) name of the owners
b) verified amount of the claim
c) intent to claim a lien, AND
d) description of the property

Front 13

What specifically must a subcontractor or sub-subcontractor do to perfect a mechanic's/materialman's lien on real property?

Back 13

1) Comply with the gen contractor's perfection requirements (memo w/i 90 days of completion/termination stating: name of owners, verified amt of claim, intent to claim lien, description of the property), AND
2) give notice to owner of the amount/character of his claim, AND
3) give notice to general contractor

--shorthand--
1) GC perfection reqts (memo w/i 90 days stating owner, amt of claim, intent to claim, description of prop) +
2) Written notice to owner (amt/char of claim) +
3) Notice to GC

Front 14

What are the limits on a subcontractor's mechanic's/materialman's lien on real property?

Back 14

Limited to the amount owed by owner to the GC at the time owner receives notice from subcontractor

Front 15

May a subcontractor benefit from a general contractor's mechanic's/materialman's lien?

Back 15

Yes if he gives written notice to the owner before owner pays GC

Front 16

Can a general contract or owner be held personally liable on a subcontractor's lien?

Back 16

-General remedy = sale of property
-There are ways to hold the GC personally liable

Front 17

How is a mechanic/materialman's lien on real property enforced?

Back 17

-Bring a suit in equity
1) SOL reqs it be brought within 6 months from the time the memorandum of lien was recorded, OR within 60 days of the time the work is completed or terminated, whichever is later
-Expiration of SOL extinguishes the lien

Front 18

Who has priority between a mechanic's lien and other lienholders?

Back 18

1) Prior lien takes priority over subsequent mechanic's lien
2) Subsequent lien is inferior to mechanic's lien IF improvements commenced BEFORE the subsequent lien obtained

Front 19

Who has priority between mechanic's lienholders?

Back 19

GR: all are equal
EX: Special rules
1) sub has priority of GC but on if filed his own lien
2) lien of laborers and those providing materials for sub have priority over sub
3) lienors furnishing labor take priority over materialmen (to the extent of the labor performed 30 days preceding the date of performance of the last laborer--all labor up to 30 days before the end)

Front 20

Can contractors waive liens?

Back 20

GR: yes
EX: GC cannot waive a sub's lien w/o authority

Front 21

What property is not subject to mechanic's/materialman's lien?

Back 21

1) public buildings (not incl. churches)
2) leased property, where lessee orders repairs/improvmements

Front 22

What is the value of pre-judgment attachment of property?

Back 22

If done before or during a lawsuit, P can use it to obtain priority on attached property (establishes jurisdiction over a nonresident)

Front 23

Is a lien created when a party attaches before judgment?

Back 23

Yes, a contingent lien with priority dating from the time of attachment is created

Front 24

What happens to a pre-judgment contingent lienholder upon receiving a judgment?

Back 24

P becomes a creditor with priority dating from the time of attachment

Front 25

What are the grounds for attaching property pre-judgment?

Back 25

1) D is nonresident or a foreign corporation
2) D has made or is about to make a fraudulent conveyance
3) D has or is about to remove his property from the state (doesn't apply to movements in the ordinary course of business)
4) D has or is about to conceal his property with intent to hinder/delay creditors

Front 26

What is the process of attachment?

Back 26

1) File a sworn petition for attachment seeking a writ of attachment
2) Post bond
3) Judicial ex parte determination of the ground
4) Judicial issuance of attachment
5) Sheriff levies on property

Front 27

What are the general pre-judgment attachment bond requirements?

Back 27

-must be an approved surety, caseh bond, or property bond
-surety, cash = FMV
-property or sheriff takes possession = double FMV

Front 28

How does the sheriff levy tangible property?

Back 28

1) if D in possession: (a) serve a copy of attachment OR (b) if P requests, take possession of the property
2) If third party in possession, sheriff must levy by serving a copy of the attachment

(always okay to serve a copy of attachment with tangible/intangible property)

Front 29

How does the sheriff levy intangible property?

Back 29

1) Sheriff serves third party with a copy of attachment

Front 30

How does the sheriff levy real estate?

Back 30

1) Sheriff serves anyone in possession of the real estate with a "copy of attachment" and the "return" sufficiently describing the real estate (when, where, what he levied and/or seized)
2) If owner is a BFP for value, file a memo of "lis pendens" in the clerk's office of the Circuit Court in which the property is located

Front 31

What happens to a contingent lien when final judgment is entered?

Back 31

-the contingent lien is consumated and the plaintiff can follow the procedure for obtaining a judgment lien

Front 32

How can a general (non-secured) creditor become a judgment creditor?

Back 32

He must sue

Front 33

What is the duration of a judgment creditor's rights?

Back 33

-He may enforce his original money judgment for 20 years from the date of judgment rendered
-Judgment extinguishes the underlying claim and gives rise to new debt-represented by the judgment itself

Front 34

How can a judgment creditor extend his rights?

Back 34

-Filing a motion to extend, OR
-Obtaining a new judgment by suing on the original judgment

Front 35

How can a judgment creditor enforce an out of state judgment?

Back 35

By domesticating it
-C must register the judgment in the office of the clerk of court, AND
-Notify D of the registration in writing

--After domestication, just like a VA judgment

Front 36

When does a judgment lien on real estate attach?

Back 36

-through/at a public act called "docketing" in the city/county where d'or own the property
-automatic docketing occurs in the county/city where the judgment is rendered