All too often, a creditor has a monetary claim against a debtor only to discover that the debtor has left the Commonwealth or has removed/disposed of his assets (or is actively marketing them) so as to render collection difficult, more costly or even impossible. Pre-trial attachment is an extraordinary remedy which, in the appropriate circumstances, permits a creditor, via the sheriff, to levy on and possibly seize a debtor’s assets prior to the creditor obtaining a court awarded judgment, thereby preventing the debtor from transferring or concealing the assets. The assets will therefore be available for collection once the creditor receives judgment. This article provides a broad overview of the pre-trial attachment process to assist a creditor in determining when it may be the appropriate available collection remedy.
Specific Requirements of Pre-Trial Attachment
Attachment, in the broader sense, is available to any person or entity who has a legal or equitable claim for: (i) specific personal property; (ii) any debt, including rent, regardless of whether the debt is then due and owing; (iii) damages for breach of any express or implied contract; or (iv) damages for a wrong, or for a judgment for which no appeal bond has been posted. The assets attached through pre-trial attachment can be personal property (tangible or intangible) or real property.
Due to the extreme nature of the remedy, the ability to obtain pre-trial attachment is limited to a narrow set of situations where the principal defendant/debtor has, is or intends to: (i) permanently leave the Commonwealth; (ii) remove the specific property at issue or the proceeds thereof from the Commonwealth leaving insufficient property in the Commonwealth to satisfy the future judgment; (iii) convert property with the intent to hinder, delay, or defraud his creditors; (iv) assign or dispose of his estate, or some part thereof, with intent to hinder, delay or defraud his creditors; or (v) abscond or has concealed or is about to conceal himself or his property to the injury of his creditors, or is a fugitive from justice. In addition, pre-trial attachment is available where the principal defendant/debtor is a foreign corporation or is a nonresident of the Commonwealth and has an obligation then due and owing in the Commonwealth. The creditor must be able to plead under oath specific facts regarding the actions or intent of the debtor that shows that one or more of the six aforementioned conditions is occurring or has occurred.
General Procedures and Costs Associated with Pre-Trial Attachment
The creditor will need to file a sworn petition which details factual allegations supporting one or more of the above situations. The court will then hold an ex parte hearing on the right of the creditor to the pre-trial attachment. This initial hearing provides the creditor a rare opportunity to educate the court about the creditor's case and the debtor's assets and activities without involvement by the debtor or other interested parties. Due to the aggressive nature of the attachment process, courts must construe statutory language narrowly in order to protect both the debtor and other possible creditors. This usually results in a court making very specific inquiries about the creditor’s case and why pre-trial attachment is necessary. A failure to strictly follow the statutory requirements causes failure of the court’s jurisdiction.
Should the court grant the pre-trial attachment, prior to execution of the attachment by the Sheriff, the creditor will be required to post bond in an amount ordered by the court. The bond is intended to insure that the debtor is properly protected should the debtor ultimately prove to the court that the creditor is not entitled to judgment. Depending on the specific property and the actions or intent of the debtor, the creditor may need the sheriff to actually seize and secure the asset as opposed to simply issuing a levy on the asset. If only a levy is issued, the asset is permitted to remain in the custody of the debtor and the debtor is enjoined from disposing of it. Accordingly, the court must determine how intrusive the attachment needs to be to adequately protect both the debtor and the creditor. The amount of the bond set by the court depends in part on whether a levy is sufficient to secure the asset or whether seizure of the asset is required.
In addition, the creditor needs to be prepared to pay appraisal costs, moving costs, storage costs and other expenses associated with seizing and holding the asset. Accordingly, at the early stage of litigation, it is essential to conduct a cost benefit analysis to insure this is the appropriate remedy considering all parties, the asset(s), the amount of the creditor’s claim, any anticipated defenses that the debtor may assert and other risks or potential pitfalls. If the court permits pre-trial attachment, the property at issue can be attached, seized and held until after a judgment is obtained in the traditional manner and thereafter sold to satisfy the judgment.
The process of pre-trial attachment is a valuable tool to combat the debtor who may take advantage of the time that the creditor would take to obtain a traditional judgment and removes himself or his assets to prevent or delay payment of the obligation during this period. It can also be a valuable tool or remedy when a debtor is in default and selling collateral in which the creditor has a security interest out of trust. In certain circumstances it may be the only remedy that results in getting a claim paid. As pre-trial attachment is a complex and fact specific collection remedy, obtaining the advice of the bank’s counsel is recommended if and when questions arise. This article represents a broad overview of pre-trial attachment law in Virginia and should not be considered an exhaustive review or legal advice.
 Virginia law distinguishes between the levy and seizure and has different requirements to obtain a seizure.
 Virginia Code § 8.01-533.
 Virginia Code § 8.01-534.