When a debt owed by a limited liability company goes unpaid, the creditor may serve garnishment papers on any bank that holds money for the LLC. The commonwealth of Virginia has a very specific process for serving a garnishment on a bank garnishee and the LLC debtor, with several different options available for how to serve these papers. Before any garnishment process may start, the creditor must obtain a judgment against the debtor.
Find a bank holding the debtor’s money. If you kept copies of checks that the debtor has given you for past payments, these may be helpful in finding the debtor’s bank. If the debtor does business with other companies with which you are familiar, contact them and ask if they have banking information on the debtor. Any credit application that the debtor completed before doing business with you may also contain banking information.
Read More: What are the Laws in Virginia Concerning a Creditor Freezing a Bank Account?
Request that the clerk of the court in which you received the judgment against the debtor to issue a writ of fieri facias -- a so-called FiFa -- against the found bank account.
Serve the bank garnishee with the FiFa. Generally, serving a bank with legal papers is very straightforward; many banks allow service of process on the authorized representative at a branch in the county where the garnishment is being pursued. The FiFa can be served on the bank by a person authorized to serve process in Virginia. Typically a law enforcement officer will serve the FiFa, but Virginia statute allows for private process servers as well.
Arrange for service of the FiFa on an authorized officer or managing member of the LLC debtor, as well as the Virginia registered agent for the LLC. The registered agent for a LLC can be found by contacting the Virginia State Corporation Commission. Again, this can be done by a law enforcement officer or a private process server. In the event the LLC cannot be found and does not have a registered agent, the clerk for the State Corporation Commission can be served.
Request the clerk to issue a "summons in garnishment" once the FiFa is served on the garnishee. Serve the summons in garnishment on the garnishee and debtor using the methods in steps 3 and 4. The judgment debtor must receive his copy of the summons soon after the summons is served on the garnishee. The summons sets the date for the court hearing at which the debtor may contest the validity of the garnishment.
Any third-party holding cash or accounts receivable for the debtor may be garnished, not just cash in a bank.
Once a FiFa is properly served, a lien is created on the LLC's cash in your favor. This money may not be released by the garnishee until authorized to do so by the court.
- Virginia's Judicial System: General District Court
- Virginia's Judicial System: General District Court Civil Forms
- Virginia Code Annotated§ 8.01-511. Institution of Garnishment Proceedings
- Code of Virginia: Title 8.01 Civil Remedies & Procedure Section 293 Authorization to Serve Process
- Virginia State Corporation Commission: FAQ Registered Agents
- Code of Virginia: Title 8.01 Civil Remedies & Procedure Section 299 How Process Served On Domestic Corporations Generally
- Code of Virginia: Title 13.1 Virginia Stock Corporation 637 Service On Corporation
Timothy Mucciante has worked as a lawyer and business consultant, and has been writing professionally since 1981. His writing has appeared in the "Michigan Bar Journal" and many corporate publications. Mucciante holds both a Bachelor of Arts in political science from Michigan State University and a Juris Doctor from Michigan State University/Detroit College of Law.