a.The judgment debtor is ordered to turn over property he possesses to thesheriff b.Debtor risks imprisonment for contempt if he does not complyc.Examination under oath of the debtor so that assets are found
a.Used to levy on personal property of the debtor in the possession of someoneelse, or on an intangible obligation due to the debtorb.The debtor’s rights of due process requires that he is given notice of thegarnishment that sets out his exemption rights, and must also have anopportunity to challenge the garnishmentc.The 3
party who owes something to the debtor is obligated to answer thewrit and must surrender the property or state grounds for not doing sod.Upon payment to the court or sheriff, funds are sent to the creditor8.Assignment for the benefit of creditorsa.Voluntary transfer of property in trust by the debtor to another person withinstructions to liquidate the property and to distribute its proceeds to thosecreditors who have elected to participateb.Does not operate as a dischargec.Cannot reserve some rights in the property or continue to use the propertyd.Cannot grant preferential treatment to a particular creditore.Cannot stipulate that the participating creditors must discharge the unpaidbalance of their claimsf.Cannot include less than all of the debtor’s executable propertyII.
Secured Debt under Nonbankruptcy Law
A.Generally1.Security agreements effective under 9-2012.The personal obligation of the debtor to pay the debt is reinforced by a right in remacquired by the creditor in certain property of the debtor.a.The debt is a personal claim against the debtor, the lien is a right in thepropertyb.Property is defined as “goods” in 9-102(44) (must be movable)c.Once secured, the property is considered “collateral” defined in UCC 9-102(12)3.In a much strong position than an unsecured creditor, it has both a right of actionagainst the debtor for the debt and a claim to property of the debtor to back up thatright.4.Only when the debtor defaults on the debt that the creditor becomes entitled totake action to terminate the debtor’s ownership and to sell the property or taketransfer of it5.Lien rights can be created in almost every kind of property, real or personal,tangible or intangible.a.A lien can be created in a piece of class of property before that property hascome into existence or before the debtor has acquired rights in it.B.
Purchase Money Security Interests (PMSI)
1.Governed by UCC 9-1032.When a loan or credit is given to the debtor for the express purpose of enabling thedebtor to acquire particular property and the property is itself used as collateral tosecure the debt3.Purchase money obligation is an obligation incurred by the debtor as all or part of the price of the collateral to enable the debtor to acquire rights in or use thecollateral.a.Example: Loan to buy a car, if debtor defaults, bank can repossess carC.Attachment and Perfections1.Attachment- when a lien is valid against both the debtor and 3