Secured creditors must be very careful in choosing their collateral.(SELECTED TOPIC)

Many creditors believe that the act of securing a loan or line of credit is much more important than choosing the actual collateral by which to secure the transaction. This is a huge mistake. It is absolutely essential to a creditor's claim that the collateral not only be properly evaluated at the outset of the transaction, but also that the value of the collateral be equal to or greater than the amount of monies loaned. The reason for this is crystal clear. Courts today will not allow a Writ of Attachment to be issued to a creditor whose security is worth less than the amount owed, if the creditor failed to obtain sufficient collateral in the beginning.

A Writ of Attachment is a pre-judgment remedy that allows an unsecured commercial creditor to create a judicial lien on a debtor's property before final adjudication of the claim. Not only is the judicial lien created, but the creditor can also force the debtor to turn property over to a sheriff or marshal while the lawsuit is pending, so that the funds or property will be available for execution after obtaining judgment.

The Writ of Attachment is also frequently used as an effective settlement tool. This is because the debtor, at the start of the lawsuit, is faced with a rapidly approaching court date and the expense of hiring an attorney to prepare and file a response to the Application for the Writ of Attachment, and to appear at that court hearing. This is not only costly, but it also forces the debtor to look at the merits of the creditor's claim. On top of all this, the debtor faces the possibility of being deprived of his assets if the creditor is successful in obtaining the Writ of Attachment.

Not every commercial claim is eligible for a Writ of Attachment--only those commercial claims having the following attributes:

* The amount of the claim must be fixed or readily ascertainable;

* The amount of the claim must not be less than $500.00;

* The claim must be unsecured, or if originally secured, the security must have become valueless or decreased to an amount of less than the amount of the debt without any act by the creditor;