Collections: Releasing Debts

     Virginia Code §8.01-454 provides that judgments, once satisfied, must be released by the creditor within thirty (30) days from when the satisfaction was made. However, if satisfaction is not made within ninety (90) days, or within ten (10) days’ notice to do so by the judgment debtor or his agent or attorney, the judgment creditor shall be liable to a fine of $100 and shall pay the filing cost of the release. 

Bankruptcy: The Automatic Stay

     Federal Bankruptcy law provides for an automatic stay (injunction) to take effect immediately upon filing for bankruptcy. The stay prevents creditors from taking any further action against debtors without court approval. The stay can stop a foreclosure or vehicle auction, even if notice of the filing is given moments before the sale is to occur. The automatic stay, unless lifted by the Bankruptcy Judge, or in some cases the trustee, remains in effect until it is terminated at the time of discharge, at which time it is replaced by a permanent injunction.
     Violation of the automatic stay is a serious offense. A willful violation can result in a finding of contempt of court. Sanctions for violating the stay can be awarded as well. These sanctions can include a fine and/or an assessment of attorney’s fees. A finding of contempt of court is also punishable by a jail sentence. Attorney consultation is always recommended when action against bankrupt debtors is contemplated.
     The automatic stay may be lifted upon proper motion and argument by creditor's counsel. Reasons for making such a motion include, among others, lack of insurance on the property, or other similar reasons resulting in the creditor being unprotected while its rights are being determined.

Collections: Releasing Debts

Virginia Code §8.01-454 provides that judgments, once satisfied, must be released by the creditor within ten (10) days from the debtor's request after payoff. Creditors may be fined for failing to do so.