Legal Question in Credit and Debt Law in Nevada
Summons regarding collection of debt based on Personal Guarantee
I was recently served a summons for the purpose of collecting a debt on a piece of equipment that was repossessed. The equipment was then sold for essentially pennies and they are trying to collect ongoing payments and interest as well as balance of the lease (approx. $150K).
My house is homesteaded in NV and fully leveraged. All other properties are in LLCs. My retirement should be protected, correct?. What are my exposures and my options at this point? (I am currently trying to negotiate with the attorney, but would like to get it to almost half. Please advise.
2 Answers from Attorneys
Re: Summons regarding collection of debt based on Personal Guarantee
Your interest in the LLCs can be subject to a charging order, but that can often be a difficult endeavor for a creditor. It sounds like the creditor would be well advised to take $.50 on the dollar.
Re: Summons regarding collection of debt based on Personal Guarantee
Nevada law has special rules governing deficiency liability following the repossession and sale of certain types of equipment:
http://www.leg.state.nv.us/Nrs/NRS-482.html#NRS482Sec5161
Under Nevada commercial law, the conditions of sale of collateral must be reasonably calculated to facilitate wholesale or retail sale at fair
market value, even though not necessarily highest possible price.
A settlement, as well as a failure to timely respond to the Summons, waives any defenses otherwise available under these laws.
Your attorney can explain further.
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