Summary Process and Real Estate Attachments

Facing an attachment on your house or summary process in general can be scary. It can lead people to dwell on whatever brought them there. Whether it's a bad business decision or an unexpected illness, many people have regrets. At Marcotte Law Firm, our Lowell Bankruptcy lawyers try to focus on the future instead of the past. If you're facing a summary process or a real estate attachment, what can you do?

Trustee Process generally falls into two categories: bank attachments and wage garnishments. With a bank attachment, the court can issue an order to freeze all your funds in the account that are above $2,500. In a wage garnishment, the court can order your employer to withhold either 15% of your gross wages or your disposable income less 50 times the average hourly minimum wage ($675 per week). 

However, there are other means of collection that are problematic once a creditor has a judgment against a debtor. In the field of consumer bankruptcy, those two areas are supplementary process and real estate attachments.

In Massachusetts, Supplementary Process is a court action where the creditor's lawyer requests a "payment review" hearing. At this hearing, the debtor must show up and fill out a financial statement. The creditor's attorney and debtor will meet and discuss what they can pay. In New Hampshire, these are called Periodic Payment Hearings.

If you can't come to an agreement with the creditor's lawyer, you will go before the Judge who will make a decision as to what the debtor has to pay periodically. They may decide that the debtor has no ability to pay, but that is in very rare circumstances.

Sounds like a great option, right? Well, a judge might not be as sympathetic as you think. If you are working and not on disability, a judge will almost certainly order a payment plan. At that point, the order from the judge becomes an Order of the Court. So, if you do not pay, you might be in contempt of court.

Further, if you do not show up to the hearing, the creditor's attorney will almost always ask for a "capias." A capias is a civil court order for arrest. Meaning, because you failed to show up at court, there will now be an arrest warrant out for you to appear for the judge and explain why you did not appear at the Supplementary Process hearing.

A real estate attachment is where a creditor's lawyer asks the court for permission to put a lien or attach to your land or home. Sometimes the court will grant them without the creditor getting a judgment, but only in certain circumstances (e.g. for a mechanic's lien). With most consumer debt (like credit card debt), the bank will first need a judgment from the court.

If the creditor has a judgment and the debtor is refusing to pay, the court may allow the request for a lien. They almost certainly will if the creditor can show they have attempted other processes like supplementary process discussed above. 

If the creditor does get the attachment, what can the debtor do? Generally, a real estate attachment only has value if there is equity in the home. That is that the home's value is substantially higher than the mortgage that is on the property. The bank with the mortgage is going to have priority over a credit card company who puts a lien on the property.

If the equity is high on the property, a real estate lien can be devastating. There is an automatic homestead in Massachusetts for $125,000, which means the creditor can attach to and obtain any equity beyond $125,000. If the property owner has filed under the Massachusetts Homestead Act, the number that is protected jumps to $500,000. Meaning, the house is going to have to be worth over $500,000 and have a no or a very small mortgage on it before the credit card company can get anything.

One solution to these problems is to file for bankruptcy. Once you file for bankruptcy, the supplementary process hearing and real estate attachment hearings are "stayed" by the US Bankruptcy Court.

If you find yourself caught in summary process or facing a real estate attachment, having an experienced Lowell attorney can be what helps you fight off the creditors. At Marcotte Law Firm, our experienced Lowell Bankruptcy Attorneys can get you the relief you need. Call a bankruptcy lawyer at Marcotte Law Firm today for a free consultation at (978) 458 – 1229.