All Those Great Recession Judgments May be Expiring Soon

Depending on who you ask, the “Great Recession” resulting from the subprime mortgage crisis began in December 2007 and lasted about two years. So, about ten years ago, I was spending most of my work days working on loan documents for third, fourth, and sometimes fifth mortgages for a local bank who was really, really late to the mortgage boom.

Of course, the impact of this past recession was felt for years afterwards, meaning my spring 2007 HELOCS didn’t go bad until 2010 or 2012. As a result, just a few years later, I was suing and taking judgments against those same borrowers. From 2008 to 2014, I estimate that I obtained at least 500 judgments, ranging in amounts from $2,500 to $5,000,000.

As I like to say, if you were hearing from me, it was bad news.

So, with a drawer full of judgments, this is what keeps me up at night: Those judgments are only valid for ten years, and, if I haven’t collected on them, they expire.

I’m taking about Tenn. Code Ann. § 28-3-110(a)(2), which provides that actions on judgments are only valid for ten years.

So, a good rule of thumb is that, if you received a judgment against someone you haven’t been able to collect in the last ten years, go back and confirm when you were awarded that judgment. If you’re getting close to the ten year mark, you might be running out of time.

(But, not to be too dramatic, I’m going to talk about how to extend that time period soon.)

 

 

General Sessions Court Refresher

One of the great things about blogging about esoteric issues that come up in my law practice is that, sometimes, I get to consult myself when a legal issue arises.

Like, right now, when I’m preparing for a Davidson County General Sessions trial that starts in an hour, and I’m trying to remember what Tennessee statute allows you to exceed the $25,000 jurisdictional limit in small claims court.

It’s Tenn. Code Ann. § 16-15-501, which allows you to exceed $25,000 in calculating a judgment, where the excess amount is comprised of attorneys fees (and/or court costs and/or discretionary costs).

So, thanks a lot, Creditor Rights 101.

Sometimes, I use Google for Legal Research

I received an e-mail from a potential client this week that sort of confused me. Frankly, I didn’t know the answer.

The dispute related to a term I hadn’t seen before. The issue involved a check that his bank had returned, unpaid, to the other bank as “Return to Maker.” When I saw that, I went around the other bank lawyers. That’s my real “first step in researching weird legal issues”–asking the older bank lawyers if they’ve ever seen this.

When they either hadn’t (or weren’t at their desks), well, I consulted Google.

And, sure, you’re probably thinking that a lawyer shouldn’t admit to googling legal questions, but you’re wrong. Google is great to get general answers or concepts, before digging down on Westlaw.

In fact, I suspect Google is how the readers of this blog got here. But, Google can’t be entirely trusted, and you have to consider the legitimacy and trust-worthiness of the source when you click on the results.

So, yes, I found out that “return to maker” means, generally, that the payor bank has reason to deny the check due to a suspicion that the negotiable instrument has been forged, modified, or is generally unsure of the legitimacy. That note instructs the drawee bank to revisit the issue with their customer.

With that information (and before I gave out any legal advice), I did that deep dive on Westlaw  to confirm my analysis under Tennessee’s UCC adoption of Article 3.

So, there you have it. If a lawyer denies using Google, don’t believe them.

 

Presenting at 2017 Family Law Forum: The Life Cycle of a Divorce

As you all know, I regularly speak at Continuing Legal Education seminars for lawyers on topics related to foreclosure, bankruptcy, and other creditor rights issues in the law.

Well, to my surprise, the Tennessee Bar Association has asked me to talk about family law, at its annual Family Law Forum: The Life Cycle of a Divorce, on May 24, 2017.

Now, before you prepare your expert-level questions about parenting plans and in futuro alimony, please know that I’m speaking on Social Media legal issues in family law matters, including things that lawyers must warn their clients against.

I’m an expert on that, because I’ve been law tweeting actively for eight years at @creditorlaw, and my firm has only asked me to delete two tweets. That’s basically a perfect track record.

And, just in case one of you do that thing where you ask presenters weirdly complicated questions, I’ve enlisted Phil Newman, a great lawyer who I refer all family law matters, to serve as my co-presenter.

I’ll post more details later.

Advice for New Lawyers: Always be Prepared, Even for the Easy Arguments

I’m not going to use this post to complain about millennials. Instead, I’m going to complain a little bit about lawyers who are lazy and don’t think for themselves. But, sometimes, this means younger lawyers who happen to be born in the “millennial footprint” (defined as being born from 1982 to 2004).

In the not so recent past, another lawyer agreed to announce a foreclosure continuance for me. This is one of the easiest tasks a degreed lawyer can handle. In fact, some firms send people in Harley Davidson t-shirts to do this, so it’s not quite rocket science.

So, I told the lawyer that the sale was at the Register of Deeds and started to walk away. Then, he asked, “where is that?” I’ll save you the annoying details, but it involved ten minutes of my time showing him how awesome google is for answering questions.

So, recently, I was headed to General Sessions Court with the intent of asking for a “free” continuance in a matter that was set for the first time. If you read this blog, you know that I got to Sessions Court all the time. And, without a doubt, the Court will grant you a free continuance on the first setting of a matter.

But, instead of just going to court and citing “this is what you Judges always do,” I thought I’d be prepared with, you know, the actual legal authority for this. So, I followed my own advice and looked at the Local Rules for General Sessions Court. And, I made the request with complete confidence that it would be granted.

Of course, when I asked for the continuance, the Judge gave it to me without question, but I was prepared for the worst case scenario.

Ok, this blog post doesn’t have a specific point, other than to note that I–having appeared in Sessions Court at least 500 times–took the time to be prepared with legal authority for a very routine request.

So, maybe that’s the point. Lawyering is hard, and so is being a Judge. Always be prepared for the worst case scenario, and take the time on your own initiative to be prepared.

 

Interpleaders: The Only Time People Like to Hear from Me

When people ask me what kind of law that I do, I always end my answer with “Generally, it’s bad news if you’re hearing from me.” In fact, if you’re reading this right now on a computer, look at my bio over to the right.

If you’re on a phone, I’ll help. It says: “It’s probably bad news if you’re hearing from him.

Recently, though, I’ve been spreading good news, because I’m filing a bunch of interpleader lawsuits.

Interpleader actions are filed by plaintiffs who are asking for court direction as to who to send cash or other property to. The typical situation arises after a foreclosure, when the foreclosure attorney sells the property for more than the debt owed, and there are multiple parties who can make a claim for those excess proceeds.

Generally, the deed of trust is pretty clear as to who gets the money, but, sometimes, it’s not clear or the situation is contentious. To be safe, you file an Complaint for Interpleader under Rule 22, name all the parties who have, or may have, a claim to the proceeds, and ask the Court to decide. This way, the judge gets to make the hard decision, and the foreclosure attorney (often the substitute trustee) isn’t exposed to future lawsuits alleging he paid the money to the wrong party.

Under Tenn. R. Civ. P. 22.02, the attorney files the lawsuit, later deposits the money with the Court, and, then, the filing attorney can be dismissed while the remaining parties fight over the money.

So, back to my phone calls this week. I was calling my “Defendants” to tell them that I was getting ready to sue them, but, “don’t worry, it’s a good lawsuit.”

 

Attend the Creditors Practice Annual Forum 2016, Learn Foreclosure in an Hour!

On September 28, 2016, some of the greatest creditor minds in Nashville will gather for the Creditors Practice Annual Forum 2016. Yes, I’m talking about foreclosures again.

Topics to be covered include:

  • Perfection and Enforcement of Liens for Prime and Remote Contractors
  • Non-Judicial Foreclosures in Tennessee
  • Ethical Issues Related to the Consumer Financial Protection Bureau
  • TBA Special Committee on the Evolving Legal Market Report

I’ll be presenting the Foreclosures portion of the seminar, which will give a one-hour overview all the laws, defenses, and issues facing lenders conducting foreclosures in Tennessee.

This should be a good seminar, so be sure to sign up to attend the live presentation, or use some of your free CLE credits from your Tennessee Bar Association membership to watch it online.