Can the debtor’s assets be immediately frozen?
That depends on several things. If a creditor’s claim arises from a contract entered into in connection with the debtor’s trade, business or profession, a court can issue a prejudgment right to attach order. The order can be obtained on an emergency basis, and under rare circumstances without notice to the debtor.
Levy of a writ of attachment under this order has the effect of freezing specific assets identified by the creditor. In the case of corporate or partnership debtors, all assets are subject to attachment. Debtors who are individual persons have the right to claim that certain of their property is exempt from the claims of creditors, including a homestead. On a tort claim (such as for defamation or unfair competition) or on a debt incurred for personal, family or household purposes, attachment is not available. Recently, the United States Supreme Court in Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 119 S. Ct. 1961, 144 L.Ed. 2d 319 (1999) ruled that blanket injunctions freezing the assets of defendants before a judgment is entered determining their liability on a claim violates due process.
Can I put a debtor into involuntary bankruptcy? »