A Newsletter for individuals and businesses concerned with Creditor’s Rights |
January 2023 | 370th Edition |
|
Collections: Confessed Judgment, Power of Attorney, and Required Signatures
|
|
|
The Fairfax County Circuit Court, in the case of Cardinal Concrete Co. v. White, ruled that where the debtor signed a power of attorney appointing an agent selected by the creditor to confess judgment on a note in the event of default, and the attorney-in-fact did not sign the instrument, the confession of judgment would not be set aside because the debtor ratified the creditor's selection of the agent, and the attorney-in-fact was not required to sign.
The facts of White were that the debtor executed a promissory note in favor of the creditor. The note contained a power of attorney stating that the creditor appointed an agent to confess judgment on behalf of the debtor. Only the debtor signed the power of attorney. After the entry of a default judgment, the debtor moved to set aside the confessed judgment on the ground that the creditor selected the attorney-in-fact, and that the attorney-in-fact did not sign the power of attorney.
The motion to set aside was denied. The Court ruled that even if the creditor had no authority to designate the attorney-in-fact, the debtor ratified the appointment by executing the power of attorney. Also, the court found that Virginia Code §8.01-435 did not require the attorney-in-fact to execute the instrument.
|
|
|
|
|
Email addresses can be used to find a debtor’s online accounts. Facebook accounts can be especially exciting and rewarding. |
|
|
Bankruptcy: Lien Avoidance Case Review: Avoidance of a Judicial Lien as a Preference
|
|
|
In Babiker v. Citizens Contracting Co. the United States Bankruptcy Court at Alexandria, Virginia, avoided a creditor's judgment lien against two debtors as a preference because the creditor was unable to demonstrate that the debtors were solvent when the judgment lien was entered within ninety days of the filing of the bankruptcy petition. The Court cited Bankruptcy Code §547(b) as authority for finding that the docketing of a judgment lien constituted a transfer to or for the benefit of a creditor. This case serves as an excellent reminder as to why swift action in taking and docketing judgment is important - delay can put you in the ninety days preference window.
|
|
|
|
|
Law Review of the Month: Legislative Action |
The firm will track any legislative matter, or draft and advocate your legislative proposal before the Virginia General Assembly. In recent years, debtors have received legislative benefits in both the Virginia General Assembly and the United States Congress. The firm believes that it is time for creditors to have their day. |
|
|
Real Estate: Using Real Estate to Secure Your Debt
|
|
|
Many fail to recognize the benefit of using real estate to improve their position as creditors. Properly securing debts through real estate could make the difference between collecting the funds and incurring a loss.
Securing debt with real estate can occur in several ways: deeds of trust, judgment liens, homeowner association liens, mechanic’s liens and lis pendens in litigation cases, just to name a few. In the upcoming issues of Creditor News we will explore these, as well as the ways that I can assist you.
We have experienced attorneys and staff who can examine title, do real estate closings, seek judgment and docket and enforce the same, and prepare and enforce statutory liens, such as those for litigation, homeowner’s associations and mechanic lien situations.
|
|
|
Foreclosure: Sale Price and Delays in Sale
|
|
|
The trustee is under a duty to “use all reasonable diligence to obtain the best price.”
If the trustee determines that in order to fulfill his fiduciary duty to realize the highest price for the property, a recess is necessary, he or she should recess the sale. Arguably, the recess is within the scope of the discretion afforded trustees in the conduct of the foreclosure sale. For example, if a bidder who previously advised the trustee of his interest in bidding on the property is delayed, the trustee, in his discretion, may recess the sale to a later hour on the same day to allow the bidder to attend the sale. If the trustee fails to accommodate the bidder and the property is sold for a price less than the bidder was willing to pay, the trustee may have breached his duty to “use all reasonable diligence to obtain the best price.” A decision by the trustee to recess the sale, however, should not impair the sale by making it impossible or impracticable for the bidders to appear and bid at the recessed sale.
The postponement of a foreclosure sale to a different day is not a recess and is governed by statute. Virginia Code §55-59.1(D) provides that the trustee, in his discretion, may postpone the sale to a different day, and no new or additional “notice” must be given. Presumably, the “notice” referred to in this section is notice of the postponement. The trustee needs only to announce at the sale that it has been postponed. §55-59.2(D) provides that if the sale is postponed, the trustee must advertise the “new” sale in the same manner as the original advertisement. Read in conjunction, these sections require the trustee who postpones the foreclosure to re-advertise the sale in the same manner as the original sale was advertised. Although the secured obligation will not need to be accelerated again, all other aspects of the foreclosure must be completed. Effectively, a postponed sale is a new sale in which the trustee must complete all acts that he or she completed in the first sale.
|
|
|
Looking for more Creditor News articles? Check our our Creditor News Blog! |
|
Lafayette, Ayers, & Whitlock, PLC is a full-service creditor’s rights firm. While many attorneys do “collections”, few attorneys have the trained expertise and staff to represent creditors in all four areas of Creditor’s Rights—Collections, Bankruptcy, Real Estate and Foreclosure. We do, and, we represent credit unions, banks, loan companies, homeowner associations, doctor’s offices, landlords, small businesses and individuals. In Creditor News we will explore all four areas of Creditor’s Rights.
|
|
Meet the Attorneys of Lafayette, Ayers & Whitlock, PLC |
|
 |
Edward S. Whitlock, III, Esq. - Editor
Eddie is a Richmond native with a concentrated law practice in creditor representation. His practice focuses on creditor’s rights (Collection, Bankruptcy, Real Estate, and Foreclosure), but also includes the general practice of law (Business and Will & Estate Planning). Eddie holds a B.A. (1984) in Political Science, and a Juris Doctor (1987) from the University of Richmond. He is the former Chief of Admin/Military Law for the 329th Support Group (Area) in the Virginia Army National Guard. Eddie is the former President of both the Henrico County Bar Association and the Virginia Creditors’ Bar Association. He is the chair of the Virginia State Bar’s Fee Dispute Resolution Program, and a former member of the Virginia State Bar’s Disciplinary Committee. He is a board member of the Henrico Economic Development Authority. He is the Vice President of Home Loans for KOVAR Corporation. He is also a former director of Henrico CASA, and a former adjunct professor of criminal law at J. Sargeant Reynolds Community College.
|
|
|
|
Jennifer W. Fischer, Esq. - Co-Editor
Jennifer concentrates her practice in creditor representation (Collection, Bankruptcy, Real Estate, and Foreclosure), but also Business and Will & Estate Planning. Jennifer holds a BS (2011) in business administration from Christopher Newport University, and a Juris Doctorate (2014) from University of Richmond, T.C. Williams School of Law. She was admitted to the Virginia State Bar in October 2014. She is a board member for the Virginia Creditors' Bar association and the Henrico County Bar Association.
|
|
|
|
CREDITOR NEWS© 2023. This newsletter is prepared and published by Edward S. Whitlock, III, Esquire, and Jennifer W. Fischer, Esquire, and is provided free of charge. The information contained in this newsletter is general in nature. It is intended to be helpful but does not, and is not meant to, replace consultation with an attorney in connection with a legal problem. Readers needing legal advice should retain competent legal counsel. |
|
Lafayette, Ayers & Whitlock, PLC www.lawplc.com
|
|
|
|
|
|
|
|
