LAW Business work

     Many of you have inquired about my availability to do business work and attend corporate, credit union, and homeowner’s association meetings. I do this, and, I am available. 

     When it comes to board work, I recognize that most board members are volunteers. Having experienced counsel available to provide advice, guidance and continuity as boards change is crucial for productive and efficient boards, as well as for avoiding potential board member liability in lawsuits. 

  When it comes to larger meetings (stockholders, credit union members, or homeowner’s associations), having experienced counsel available to explain rights and options, as well as analyze courses of action and provide advice can be invaluable. 

     If you think that you may have a need, please call me so that we can discuss. I can structure a reasonable rate to fit your needs. 

Eddie

Creditors, Let's Talk about Post Judgment Collections

     Post Judgment Collections. Frequently this is the time that you will collect most of your money.

     While at Lafayette, Ayers & Whitlock PLC we represent creditors from beginning to end in the collection process, we recognize that some creditors either still file some of their own suits, or, have done so in the past. After taking that judgment, and if collection does not come easy, all too frequently judgments are “put on the shelf” and eventually forgotten. Do not let this happen to you! At Lafayette, Ayers & Whitlock PLC we can help you collect judgments that you have already taken. Your General District Court judgments are good for ten years, but can be docketed in a Circuit Court to extend the life of the judgment to twenty years. These judgments can even be renewed for an additional twenty years. We can work your old judgments. We have the most up-to-date programs, resources and methods. We do all of this on a percentage of collections fee basis – in other words, if we do not collect, you do not pay us a fee. Accordingly, our incentive is to collect! I take pride in the fact that at Lafayette, Ayers & Whitlock PLC our experience, staff, responsiveness and resources have made our post judgment collections superior to other collectors. 

     I invite you to please call me so that we can discuss your questions. 

Eddie

Foreclosure: Deeds of Trust

     It all starts with the deed of trust. The deed of trust is the primary method of acquiring a lien against real estate in Virginia. With a deed of trust, the owner of the real estate conveys legal title to a trustee, in trust, to secure the noteholder’s indebtedness. A deed of trust establishes a lien on the subject real estate upon execution by the grantor and recordation in the land records of the Circuit Court for the jurisdiction (County or City) in which the property is located. While recording the deed of trust is not essential to the validity of the deed of trust between the parties, an unrecorded deed of trust does not establish a lien on the subject real estate as to other creditors and purchasers of the grantor. An unrecorded deed of trust will not provide the beneficiary of the deed of trust with a priority position against other creditors with recorded liens, even if they are subsequent in time.

Real Estate: Using Real Estate as a Collection Tool

     Collecting money owed can be a job. Having more tools to do the work is good! Securing your debt with real estate is a great tool. In future blogs we will explore ways that use this tool. Blogs will include such topics as: Deeds of Trust, Foreclosure, Docketing Judgments, Lis Pendens, Recording Mechanic’s Liens, Suits to Enforce Mechanic’s Liens, Foreclosing on Mechanic’s Liens, Recording Homeowners Association Liens, Foreclosing on Homeowners Association Liens and more. 

     We have experienced attorneys and staff who can examine title, do real estate closings, seek judgment and docket and enforce the same, and prepare and enforce statutory liens, such as those for litigation, homeowner’s associations and mechanic lien situations. Please call me so that we can discuss how we can help you.

Bankruptcy: Dischargeability of Debt - False Financial Statement

     In the case of Chopp & Co. v. Luria, the United States Bankruptcy Court at Alexandria, Virginia, concluded that a bankrupt builder's omission from a supplier's credit application of a bank's earlier consent judgment against the builder was not made with the "intent to deceive" and the builder's debt to the supplier was not exempt from discharge pursuant to Bankruptcy Code §523 (a)(2)(B). 

     The Court found as fact that the debtor signed a credit application which he knew was being submitted to the creditor. The Court further found as fact that the credit application incorrectly represented that the debtor had no judgments entered against him within the last five years when, in fact, there had been a substantial judgment docketed against the debtor within one year of the credit application. The Court also found as fact that the consent order was entered under a workout agreement on a separate loan. The Court further found as fact that the debt had been fully paid off, the judgment did not show up on the builder's credit report, and there was no evidence that the builder knew that the consent order had ever been entered. The Court noted that the judgment at issue arose from a financial workout agreement between the bank, the debtor and other related parties on a large mortgage loan. As part of the agreement, under which the bank was to be paid in full, the debtor and his related entities executed the judgment order by consent. Under the agreement the loan was to be paid by new financing and by sales of property. The consent judgment essentially served as backup protection to the bank if its loan was not fully paid by a set date. This deadline passed without full payment because of delays in settlement under contracts for sale of realty by the debtor's business entities. The contemplated settlement eventually took place, and the bank's judgment had been paid in full six months before the debtor made the credit application at issue.

     Considering all of these facts in light of the applicable law, the Court had to determine, in order to find that the debt was nondischargeable, that the debtor's statement was materially false, that the creditor reasonably relied on the statement, and that the debtor had the intent to deceive the creditor.

     In regard to the "materially false requirement", the Court ruled that "..the omission of such a substantial judgment from debtor's credit application was plainly a materially false statement..".

     Upon considering reasonable reliance, the Court ruled that "...the evidence demonstrates that plaintiff had a very conservative policy on extending credit and that its policy has resulted in lower than average bad debts. Based upon plaintiff's unrefuted evidence, it seems likely that plaintiff would have denied open account credit to debtor's corporation if the judgment had been disclosed...". "..plaintiff's reliance on debtor's credit application was objectively reasonable and was actually relied upon by plaintiff in extending credit...".

     In regard to the "intent to deceive" requirement, however, the Court found that the evidence failed to establish that debtor actually knew that the judgment had been docketed. The Court then looked to see if the intent could be imputed through reckless indifference. Given the workout arrangements, given the fact that the judgment was paid within three months of entry, given the fact that no adverse information appeared on the debtor's credit report, and given the fact that there was no evidence that the debtor had been informed of the bank's entry of the judgment, the Court stated that it was unwilling to infer from the circumstantial evidence that the debtor recklessly failed to disclose the judgment. Accordingly the Court concluded that the debtor did not publish the financial statement with intent to deceive plaintiff.