After a lender forecloses a lien on a real property, oftentimes there will be a “deficiency.”  If the proceeds of the sale are insufficient to satisfy the outstanding debt on the property, “deficiency” refers to the amount of debt remaining for which the borrower may still be personally liable. The amount of the deficiency is generally the difference between the proceeds paid to the lender (creditor) and the remaining amount of the debt.

Arizona law provides protection for borrowers against deficiency judgments in certain circumstances. Typically, loans used to refinance purchase money loans are also considered purchase money loans, although the use of some of the proceeds to pay other debts or obtain cash out may expose the borrower to recourse liability.

Interpretation of the Arizona anti-deficiency statutes and related real estate laws can be very complicated, so borrowers are advised to seek the assistance of an experienced Arizona attorney.

If you would like more information about deficiency litigation, creditor’s rights, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

“Process” is the general term for the legal document by which a lawsuit is started and the court asserts its jurisdiction over the parties and the controversy. “Service of Process” refers to the delivery of a writ, summons, or other legal papers to the person required to respond to them. Process must be properly served on all parties in any action.

Service of process must be made by a sheriff, a sheriff’s deputy, a private process server registered with the clerk of the court pursuant to Rule 4(d) of the Arizona Rules of Civil Procedure, or any other person specially appointed by the court.

The proper time for service of process depends on the type of action. Service must be made within the time the law allows for each particular type of legal action, because it is service that starts the lawsuit.

Each state also has specific laws regarding service of process. Arizona courts may exercise personal jurisdiction over parties, whether found within or outside the state, to the maximum extent permitted by the state Constitution and the Constitution of the United States. Arizona has strict rules regarding how service upon parties located outside the state may be made.

If you would like more information about service of process, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

In creditors’ rights law, replevin is a legal remedy allowing a person to recover goods unlawfully withheld from the creditor. In a replevin action, the plaintiff must prove a legal right to the possession of the property, and that the defendant has wrongful possession of the property.

Secured creditors seeking to take possession of collateral often file replevin actions. Following payment default, an automobile finance company might initiate a replevin action to gain possession of a vehicle. Replevin actions are usually employed when the borrower prevents the lender from using self-help repossession. Arizona permits self-help repossession as long as there is no breach of the peace.

Replevin is a civil action, not a criminal one, and concerns the return of an actual specific item or items, not monetary compensation for loss. Replevin actions may take one of two forms:

1. the plaintiff seeks immediate possession of the property (without notice)
2. the plaintiff opts for an adjudication of final rights (with notice)

When the plaintiff/creditor opts to adjudicate the right to possession, generally he will give testimony and provide business records showing the borrower/defendant’s obligation to pay, and showing that the borrower/defendant has defaulted. If the Court rules in the creditor’s favor, a judgment and Writ of Replevin will be issued. The steps subsequently taken to secure the physical possession of the collateral/goods are called the replevy.

If you would like more information about replevin actions, creditor’s rights, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

 

 

A surety, or guarantor, is the person responsible for payment or performance for another party, should the original party fail to pay or perform. The performance may be a debt or the posting of a bond, such as a construction bond.

The surety relationship is established by contract and involves three parties:

▪       The obligee/creditor: the party to whom the debt or obligation is owed.

▪       The obligor/principal debtor: the person who has the primary responsibility to perform (to both obligee and surety.)

▪       The surety/guarantor: the person who promises the obligee/creditor that he/she (surety/guarantor) will be liable for the performance of the obligor/principal debtor.

When a debtor defaults, creditors looking for payment must first attempt to collect from the principal debtor. However, the creditor is not required to exhaust all legal remedies against the debtor/obligor before collecting from the surety.

If you would like more information about sureties, creditor’s rights, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

When a creditor gets a money judgment against a debtor, the creditor will search out the debtor’s income and assets in order to begin collecting on the judgment. The legal means of finding assets is known as  “discovery in aid of execution.” (The legal term “discovery” refers to a different process.)  Common procedures creditors use are: debtor’s examinations, written interrogatories, and/or court hearings during which the creditor asks the debtor about the debtor’s income and property.

A creditor might expect that this information would be complete because the debtor is answering under the penalty of perjury, but that is not always the case. Sometimes assets are hidden or not found in obvious places.  Before they can be frozen or garnished, assets must first be identified.

Places creditors can look for assets include:

▪       Bank records

▪       Copies of cancelled checks

▪       Deed records

▪       Payroll records from the debtor’s employer

▪       Tax returns

Other less obvious sources can include:

▪       Ongoing or potential lawsuits, including personal injury and insurance claims

▪       Lottery winnings

▪       Beneficial interests in trusts

▪       Retirement benefits, present or future

▪       Inheritances, including those currently in probate court

▪       Co-owned assets such as bank accounts, real estate, automobiles

Certain assets are protected by law from creditors. In Arizona, these exempt assets include:

▪       Homestead property (up to $150,000)

▪       Life insurance (individual)

▪       Annuities

▪       IRA accounts

▪       Pensions (certain types)

If you would like to know more about asset discovery, creditor’s rights, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

A receivership can be thought of as a legal action where control of a company is taken from management and a receiver is appointed to run the company. Receivership can be part of the terms of a bankruptcy ruling.

Different conditions can lead to the establishment of a receivership. For example, the creditors of a financially distressed company can ask that a receiver be named, in order to preserve as many of the company’s assets as possible.  Creditors seek to be repaid; the receiver seeks to pull the company out of debt to the greatest possible extent.

In most cases the receiver is given ultimate decision-making powers and has full discretion in managing the company and its debts.   The receiver’s powers may be dictated by statute, court order, or financing agreements.  Whether the source of the debt is creditors or unpaid loans, the receiver must choose the best way to discharge that debt.

If you would like more information or need assistance from an attorney regarding receivership actions, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.  

Most borrowers repay their debts in a timely manner. But what happens when they don’t? What are the rights of creditors ? What rules must creditors follow?

When you are ready to hire an attorney to use the court system to enforce a claim, hire an experienced and competent attorney.  Once an attorney is hired, there are a number of court based remedies, including:

▪       Replevin: A creditor may take property from the debtor if the creditor holds title to that property. There are specific notice and hearing requirements for replevin.

▪       Attachment: Through attachment, the court can order the creditor to take the debtor’s property. Attachment is only available when it appears the debtor is going to dispose of the property.

▪       Lawsuits and liens: A creditor can request relief from the court. By suing the debtor, a creditor can receive the right to take the debtor’s property in order to recover the debt.

Judgment creditors have the right to use the tools of the justice system.  For instance, they can garnish wages or bank accounts to get their judgments paid.

If you would like more information about options for creditors, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

Here’s a nightmare for any creditor with a bankrupt debtor:  Your borrower filed bankruptcy; they have no assets, you went to the trouble of filing a claim on a debt you’re never going to get paid on; and, now, you get sued for not properly redacting your proof of claim.

A hot-button issue in Bankruptcy court is adversary proceedings (i.e. bankruptcy lawsuits) against creditors for failure to redact personal information when they file Proofs of Claim.

When you file a Proof of Claim in Bankruptcy Court, you are obliged to comply with Federal Rule of Bankruptcy Procedure 9037.

To clarify, “redaction” means that you must cross out or otherwise remove personal identifying information. If you file a proof of claim containing personal information, there are ways to “fix” the filing.  A creditor can file a motion to redact.  The offending information can be blocked.

If you would like more information about creditor’s rights, or need assistance from an attorney, contact Windtberg & Zdancewicz  to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.  

Filing a proof of claim is done under penalty of perjury and subjects the signor to monetary fines if it is established the proof of claim is false or misleading.  Filing a proof of claim is serious business.  A proof of claim is prima facie evidence of the amount of the creditor’s claim, unless there is an objection to the claim.

Objections may come from the debtor, trustee, or other interested party.

Some objections include:

▪       amount is incorrect

▪       claim includes improper interest or penalty charges

▪       claim indicates it is a priority or secured claim when it is not

▪       creditor filed the claim to harass the debtor

▪       creditor did not attach supporting documentation

▪       the claim is late

Generally, in a Chapter 7 bankruptcy case, only the Bankruptcy Trustee may object. Chapter 7 debtors generally will not qualify as a “party in interest” –a person or entity with a financial stake in the outcome of the claim at issue–for the purpose of objecting to a claim.

The objecting party must present sufficient evidence that the creditor’s claim should not be allowed. If the objecting party produces such evidence, the burden of proof shifts back to the creditor to prove their claim.

Chapter 13 cases are different in that any party in interest, including the debtor, may object to a claim.

To learn more about bankruptcy proof of claim, or need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.  

It is helpful to understand basic terms associated with bankruptcy proceedings, such as proof of claim.  A proof of claim is a written statement notifying the bankruptcy court, debtor, trustee, and other interested parties that a creditor wishes to receive a distribution from the bankruptcy estate. In most Chapter 7 and Chapter 13 cases with assets, all unsecured creditors must file a proof of claim to get paid.

The filing deadline is usually included with the first notice sent to creditors, informing them that a petition has been filed and a date set for the meeting of creditors. This notice also sets the deadline to file objections to the discharge. Extensions are not usually granted, but can be if a creditor shows extenuating circumstances or excusable neglect.

Forms are available for filing a formal proof of claim.  The form requests basic information including type of claim, basis for claim, amount owed and supporting documentation.

Some courts will accept an informal proof of claim from a creditor if it:

▪       Is submitted in writing

▪       Includes a demand against the bankruptcy estate

▪       Demonstrates the intent to hold the estate liable

▪       Is filed with the bankruptcy court

▪       Is deemed fair under the circumstances of the case

The bankruptcy judge decides whether an informal proof of claim will be allowed.  In no-asset Chapter 7 cases, a court may instruct creditors not to file because there will be no money to distribute. If assets become available later, the trustee must provide creditors with notice, after which creditors must file a proof of claim.

To learn more about bankruptcy proof of claim, or if you need assistance filing a proof of claim, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.