Other Prejudgment Remedies
Besides attachment, there are other procedures to help the creditor secure payment from a debtor before the final judgment. Generally, these prejudgment remedies require that the creditor demonstrate that it is likely that the creditor will prevail in the lawsuit and that the creditor's win may be moot unless the court authorizes some action before judgment is rendered to protect property that is in the hands of the debtor or a 3rd party, such as a bank. To satisfy the due process of law, the debtor is entitled to a hearing immediately after the prejudgment action to raise any defenses or objections. If the defendant ultimately prevails, then he will be entitled to damages from the plaintiff creditor for the limitation of his property rights.
Prejudgment garnishment is like attachment, but instead of seizing property held by the debtor, the sheriff seizes or holds property held by a 3rd party that was for the benefit of the debtor. A classic example of prejudgment garnishment is the seizure of money held in bank accounts. The bank, as a 3rd party, holds the money for the benefit of the debtor. However, if the debtor learns of the lawsuit, he may take the money out of his account to protect it from seizure. Prejudgment garnishment prevents this.
Prejudgment garnishment proceeds like a garnishment to enforce a judgment. However, the creditor usually applies for the writ of garnishment ex parte — without notifying the debtor before the garnishment.
If the garnishment is for money held in a bank account, then the creditor may try to get a writ of garnishment without notifying the debtor. However, as in ex parte attachment, where the debtor is not given a notice until after the garnishment, the debtor must be given a prompt hearing after the garnishment so that any defenses to the garnishment can be raised.
The creditor garnishor obtains a writ of garnishment from the court, then delivers it to the sheriff. The writ is served on the 3rd party garnishee and a copy on the debtor.
Replevin (Sequestration, Claim and Delivery)
Replevin is like attachment, in that property is levied for the creditor's benefit until a judgment is rendered, but whereas any nonexempt property can be attached, replevin is the attachment of specific property where the creditor has a superior interest in the property over that of the debtor. Replevin is a possessory legal action to obtain specific tangible personal property that was either wrongfully taken by the defendant or wrongfully detained.
The creditor seeking a replevin has a secured interest in the property and the right to take possession of the property, usually for nonpayment of the secured debt. The creditor may be able to possess the property through her own efforts, but if she is not able to, then she could seek a replevin to force the defendant to deliver the property.
After filing suit, the creditor must file an affidavit affirming that the creditor has a right to the immediate possession of the property. If the court agrees, then the court clerk issues a writ of replevin, which the creditor gives to the sheriff, who then levies the debtor's property that is the subject of the writ. Unlike in attachment where the sheriff would hold the property until the judgment, the sheriff gives the property to the creditor, who must hold and protect the property until judgment and post a surety bond to ensure performance.
Many creditors seek prejudgment replevin, where the sheriff levies the property before giving notice to the debtor (ex parte action), to prevent the debtor from hiding, transferring or destroying the property. Prejudgment replevin is subject to the same strict procedural safeguards that apply to any prejudgment remedies, such as granting a hearing soon after the replevin action so that the debtor can raise any defenses. If the creditor loses the case, then she will be liable for damages to the debtor for the wrongful taking and possession of the debtor's property.
Lis pendens is a constructive notice in the appropriate real estate records that the real property is a subject of a lawsuit, and that any buyer or encumbrancer of the property will be subject to the outcome of the lawsuit. A lis pendens notice can be filed by a creditor without requiring court action; hence, it is not a lien, but simply a notice to any 3rd parties with an interest in the property, and who will be subject to any disposition of the property by the court.
Some property, such as the property of a partnership or corporation, being sought by creditors for sale to satisfy their debts requires maintenance and administration. The court may appoint a receiver, who, as an officer of the court, takes over the administration of the property until judgment of the underlying lawsuit. The powers and duties of the receiver are stipulated in the court order, and the receiver must post a bond to ensure its performance in administering the property. The creditor must demonstrate both that it is likely to prevail in its lawsuit and that the property will suffer irreparable harm unless it is placed in receivership. Receiverships are often used to liquidate a property under state law.
A creditor may also seek an injunction against a debtor to protect property, where the court orders the defendant to preserve assets for the benefit of the creditor if it prevails in its lawsuit. If the debtor violates the injunction, then the debtor may suffer criminal and civil sanctions for violating the court order. Injunctions, however, do not offer the same protection of property as levying the property, since if the debtor does dispose of the property, then although the debtor is punished, the creditor may not get anything. Furthermore, if the creditor loses the suit, then the debtor will be entitled to damages for the wrongful enjoinder.