Bankruptcy

Pre-Judgment Remedies Again? Everything Old is New Again!

By Joseph McDaniel, Esq.

He had essentially memorized the pre-judgment remedy statutes. Knew 'em backwards and forwards.

He had been a marine, and he was a really, truly, and seriously tough guy. He'd been on the beaches at Normandy, and afterward had gotten a broken back when a wave hit his ship. But he was way too tough to die from a garden-variety broken back. Then he became a lawyer. Then he came to Phoenix, Arizona, and became a paralegal. He worked for me for a long time, and took the worst care of himself that I've ever seen. Every day, both before and after his heart attacks and amputations, he ate a Breakfast Jack, extra greasy.

As he was being rolled out of intensive care one time, he asked the orderly for a cigarette. And got it. And, of course, smoked it.

Finally he smoked his one millionth cigarette, knocked back his one millionth shot of whiskey, and then Fred was dead. I still miss him.

Today I was reminded of Fred because a beautiful couple told me that they were waiting for the Sheriff to come out and execute on a pre-judgment remedy.

The reason that it made me think of Fred is that I haven't seen a creditor try to use a pre-judgment remedy since before Fred was dead.

Okay; a pre-judgment remedy happens when a creditor wants to grab stuff before bothering with all that silly "go to Court and get a judgment" silliness.

That enthusiastic creditor must pay a price for his first-in-line attitude; the creditor must post a great big bond to get his pre-judgment relief.

As a result, few ordinary creditors are willing to post that bond, and therefore few creditors actually use a pre-judgment remedy.

It doesn't much matter; what's going to happen is that the lovely couple will file a Chapter 7 Bankruptcy and that will bring things to a screeching halt with the automatic stay of 11 USC 362.

In addition, if the creditor actually manages to collect anything pursuant to his pre-judgment remedy, the bankruptcy trustee will make him cough it up, because the creditor will have received a preference!

Final thought: once I'm retained, if I'm retained, I'll call and give the collection lawyer a heads-up courtesy call. No need for him to waste his time and effort and energy when he won't be able to keep whatever it is that he grabs. And no need for his client to get cranky with the aggressive collection lawyer, which will happen when the collection lawyer gets to explain why it is that the creditor has to return all the dough he received, even if he's paid a third of it to the collection lawyer.

Because there's no good reason to make things rough on the collection lawyer. He's just doing his job.

Fred did a lot of collection work at one point in his career.

And he was very effective.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on July 08, 2009 (boomark / email).