Category Archives: Creditor’s Rights

Secured loans are those in which the lender has an interest in the collateral, such as a home or car, that could potentially be taken back to pay the debt.  Examples of secured loans include:

• Mortgages
• Deeds of trust
• Liens
• Auto loans

Bankruptcy debtors with secured debts may file either Chapter 7 or Chapter 13. Chapter 7 debtors generally must pay the secured loan on the same terms as before bankruptcy.  Chapter 13 debtors may have options, however, to modify the terms on which a secured loan is to be repaid.

The handling of secured debt in Chapter 13 bankruptcy carries several conditions.  The debtor’s plan must:

• Be accepted by the creditor OR:
• Propose how to pay the secured creditor’s claim OR:
• Relinquish the (collateral property) to the creditor

Most often, the plan must provide for payment of the value of the property plus interest from the date the plan is proposed.  There are exceptions to how Chapter 13 bankruptcy creditors may assert their claims on secured debt.  For example:

• If the collateral is the debtor’s primary residence
• If a vehicle or personal property was purchased within a specified period prior to bankruptcy filing—commonly called “910” claims

If the debtor has a joint obligation with a co-signer on a loan, and that co-signer has not filed for bankruptcy, the co-signer’s obligation is not affected by a Chapter 13 bankruptcy plan.  Depending on whether the creditor’s claim is in full, the property may still be repossessed by the creditor.  For that reason, some debtors will pay the co-signed loan in full, releasing the co-signer from any further responsibility for that debt.

If you would like more information about secured loans in Chapter 13 bankruptcy, creditors’ rights, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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 contract is a legally enforceable agreement between parties, which specifies duties, services or products to be exchanged (plus any related details).  When one party fails to fulfill the duties agreed to under the contract terms, this is known as a breach of contract.

A contract can be breached in different ways:

• One party does not perform as promised
• One party prevents the other party from performing the duties of the contract
• One party indicates the intention of not fulfilling the contract duties

When one party breaches the contract, the other party, who has fulfilled the terms of the agreement, is entitled to various remedies.   Awarding of damages is one common remedy; generally these take the form of monies paid by the breaching party to compensate the other party for losses and other expenses connected with the breach.

There are several types of damage awards:

• Consequential damages.  The breaching party pays the non-breaching party an amount that puts the non-breaching party in the same position as if the contract had been fulfilled.
• Punitive damages.  The court requires the breaching party to make a payment as a punishment for the breach of contract.
• Liquidated damages.  This is a pre-determined sum, written into the contract, to be paid by the breaching party in the event that a breach occurs.
• Nominal damages.  A minimal amount paid to the non-breaching party if that party won the case but did not incur financial hardship due to the breach.

Each state varies as to the period of time in which a breach of contract lawsuit must be filed. In Arizona, the statute of limitations takes into consideration the type of contract:

• Breach of oral contract: 3 years
• Breach of written contract executed within Arizona: 6 years
• Breach of written contract executed outside Arizona:  4 years
• Breach of contract for sale:  4 years (as specified by the Uniform Commercial Code)

Contract law as well as breach of contract lawsuits can be complex in nature; so an experienced breach of contract attorney can be an essential resource.

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

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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.

Every creditor should be familiar with the basics of business contracts. By definition, a contract is a legally enforceable agreement that specifies the duties of each party, the services to be performed, or the products or things to be exchanged (plus any related details).  Having a clearly written contract may prevent problems such as disputes and misunderstandings, as well as providing a basis for legal remedies for each of the parties involved.

Contracts are  vital to maintaining cordial and productive relationships with customers, partners, vendors, consultants, and any other person or entity involved in conducting that business. For a creditor, understanding the particulars of a debtor’s failure to fulfill a contract can be advantageous in pursuing payment and/or other legal remedies.

A legally valid business contract must contain several key elements:

▪        Offer, Acceptance, and Mutual Consent. A specific offer accepted by both parties, made of each party’s free will.

▪        Parties. Contract must include the names and/or entities of all parties (such as a company name) involved in the agreement.

▪        Consideration. An exchange of value (such as money, goods or services) between parties, with each party providing a consideration.

▪        Competence. Parties agreeing to a contract must be of “sound mind:”  Each party must be adults, they must be mentally competent by legal standards, and they may not be under the influence of drugs or alcohol at the time the contract is executed

▪        Legal Purpose. The purpose of the contract must be a legal one and must be included in the contract, prior to the elaboration of the details. The stated purpose must include:

▪   Mention of the services provided

▪        The product created

▪        The labor exerted

▪        Any other specific element relating to the purpose of the agreement

▪        Terms And Conditions. A business contract must specify the rights and obligations of each party. These can include confidentiality clauses, deadlines and timelines for project completion, and payment due dates, amounts, and penalties.  Additionally, statements can be incorporated regarding how the contract may be terminated and any consequences resulting from termination.

The majority of contracts are concluded to the mutual satisfaction of both parties. However, should one party fail to fulfill his/her responsibilities under a contract, there are legal remedies that are available. Before embarking upon any course of action, though, competent legal counsel should be consulted.

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

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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.

The term forcible detainer, also called summary eviction, refers to statutes and legal remedies that landlords may utilize to regain possession of their property.  This remedy applies only to cases in which the landlord (plaintiff) has an undisputed right to possession.  Legal action may be brought against tenants who have defaulted on their rent and who refuse to leave.  The action also covers “squatters” residing on a property without lease or title.  Once process is served on the uncooperative parties the court trial and eviction can occur within a few days.

The Arizona Residential Landlord and Tenant Act details the rights of the state’s residential property owners in relation to tenants.  The terms “forcible detainer” and “eviction” are often used interchangeably when referring to residential evictions.

In a forcible detainer action, should the court grant judgment to the landlord (plaintiff), the tenant can be ordered to pay the outstanding rent, late fees, costs and any attorney’s fees. This judgment can be collected like any other civil judgment, and the creditor (judgment holder) may utilize several types of remedies to collect, such as garnishment, attachment, and execution.

Legally removing the tenant from the premises requires a Writ of Restitution. The court does not automatically issue this; the plaintiff/landlord must return to court and request this if the tenant does not voluntarily relinquish the premises.

The assistance of an experienced attorney can help landlord creditors avoid frustration as well as many potential obstacles in the forcible detainer action process.

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

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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.

Document recording can be defined as the act of putting one or more documents into the official records of a county:  in Arizona, that would be accomplished via the County Recorder’s office.

The most commonly recorded types of documents are those associated with real property and matters related to its ownership.  These include:

• Deeds and trustee’s deeds
• Mortgages
• Record of payments, judgments, and satisfaction of judgments
• Liens and lien alerts
• Foreclosure
• Assignment
• Loan Modification
• Court documents and affidavits
• Warranty Deeds
• Quitclaims

Since creditors often have issues relating to these documents and actions, it is important for creditors to be familiar with the requirements for recording documents. Knowledge and preparation can help facilitate the progress of a creditor’s legal actions, and prevent costly errors and delays.

Here are the basics of the document recording process:

• Document is accepted for recording by the Recorder’s office
• Recording fee is paid
• Document is given a document/volume/page number
• Document is date/time-stamped
• Copy of document is made; original is later sent or e-mailed back

Recently, electronic document recording (e-recording) via Internet introduced a faster, more economical way to submit and pay for document recording. Turnaround time has also improved greatly, as e-recorded documents are often returned to the customer within minutes or hours of submission.

There are statutes that govern recording documents in Arizona, ranging from proper formatting to monetary penalties regarding falsification of information.  The better prepared a creditor is when recording documents, the greater the opportunity to pursue problem-free legal outcomes.

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

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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.

Generally speaking, when a borrower defaults on a loan, the creditor pursues a money judgment against the debtor.

Student loan debt now exceeds one trillion dollars.  Some student loans are made through private lenders, but most originate from, and are guaranteed by, the Federal government.

Defaults on student loan debt will likely rise, and legal action to enforce the defaults will increase as well.  Enforcement of defaulted student loan debt will likely trend upward, and affect many members of the workforce.

Wage garnishment will become more commonplace and having experienced legal counsel will be important for creditors who want payment.

The pressures of the recovering economy, stricter credit guidelines, and looming rises in student loan rates all come into consideration for student loan debtors – and for their creditors.

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

The attorneys at Windtberg & Zdancewicz, PLC, provide clients 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.

Federal bankruptcy laws allow for certain exemptions, as do state laws.  New and revised laws along with ongoing interpretations by courts continually affect the way exemptions are addressed. What follows is a brief, partial summary of recent changes to Arizona state exemptions.

Arizona Revised Statutes 33-1123 Household furniture, furnishing and appliances.

This exemption has gone from a specific list of items, such as chairs, lamps, etc. to a broad description of categories.  Among those:

▪       Household furniture and furnishings

▪       Household goods including consumer electronic devices

The exemption amount for household items has also increased.

Arizona Revised Statutes 33-1130 Tools and equipment used in a commercial activity, trade, business or profession.

This statute has also been updated to reflect societal changes and how the “tools” of productivity have been redefined. The amount of value allotted to “Tools, equipment, instruments and books” has nearly doubled.

A list was added of intangible assets that are now considered exempt assets for businesses, including:

▪       Telephone numbers

▪       Client or customer contact information

▪       Marketing tools such as websites, domain names or any other intangible work product

If you would like more information about bankruptcy law in Arizona, 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.

The term insolvency can be defined as the condition of having more debts (liabilities) than total assets available to pay them, even if the assets are mortgaged or sold.  The term is an important one in financial, accounting, and credit matters.  Insolvency and bankruptcy are very different from each other, despite often being used interchangeably.

In the state of Arizona, a person is considered insolvent if:

▪       The sum of the debtor’s debts is greater than all of the debtor’s assets at a fair valuation

▪       The debtor is generally not paying his debts as they become due

Insolvency can arise from several things:

▪       Poor cash management

▪       A reduction in the forecasted cash inflow

▪       An increase in cash expenses

Bankruptcy is a both a legal term and a legal process; insolvency is a condition.  First, a debtor becomes insolvent with no chance of remedy, before opting to file for bankruptcy.

After bankruptcy proceedings, what follows is a determination by the court that the person or business cannot raise the funds to pay all of his/her debts.  When that determination is made, the court will then discharge (forgive) some or all of the debts, leaving some creditors facing no prospects of getting paid.

The classic cartoon figure of the person wearing nothing but a barrel to indicate a total lack of wherewithal is not really accurate. An insolvent individual debtor, even when found to be bankrupt, is allowed certain exemptions that permit them to retain exempt assets defined by statute and certain assets given as security as long as payments are made on any loan collateralized or secured by that property.

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

Fraudulent transfer law is widely applied today to challenge financial transactions when debtors are insolvent, on the verge of insolvency, or when the transfer makes them insolvent.  Suspicion that a fraudulent transfer has occurred may arise when, after a transfer a company is unable to pay its creditors.

Transfers can involve actual or constructive fraud – or both – depending on the company’s financial state when the transaction is completed.  Because testimony and establishing intent often yields inconclusive results, courts may utilize different methods of analysis, called “objective tests,” to determine whether a transaction is “constructively fraudulent.”

One example is the “Unreasonably Small Capital” test.  A company is determined to have unreasonably small capital if, at the time of the transaction(s) in question:

▪       The company is insolvent

▪       All its assets have been encumbered

▪       The company has insufficient cash flow

▪       The company has a significant reduction in working capital

▪       The company’s financial state is unfavorable to creditors in that payment is unlikely

Despite the many complex methods of analysis applied in such cases it can difficult to prove that a transfer is constructively fraudulent.  In fact, creditors often have had to settle their fraudulent transfer claims for less-than-optimal amounts.   Participants in transfers, on the other hand, may be perceived as more advantaged, taking on risky acquisitions at what often proves to be the creditors’ expense.

If you would like more information about fraudulent transfers, 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.

If a creditor believes that a debtor has committed a fraudulent transfer, the creditor can pursue various judicial remedies.

Some of these remedies include:

• voiding the asset transfer in question
• garnishment against the transferee/recipient
• attachment against the transferred asset or other property of the transferee
• An injunction against further disposition of assets by the debtor or transferee
• appointment of a Receiver

The Uniform Fraudulent Transfer Act  (UFTA) adds weight to the remedies available to creditors.  Often the UFTA can serve as a strong deterrent against fraudulent transfers instead of a remedy to be applied after judgment.

If you would like more information about creditors’ rights relating to fraudulent transfers, 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.