David Anthony will Address Collecting Debts in General Sessions for Tennessee Bar Association

The Tennessee Bar Association will hold a general practice summit next week, and Bone McAllester Norton attorney David M. Anthony is slated as a presenter. David, who practices in the Nashville firm’s commercial lending and creditors’ rights practice, will present “Collecting Debts in General Sessions” on Friday, Aug. 15. The summit will offer education to general practitioners on trending, important topics, like David’s collection session, as well as updates in tax laws, social security disability basics, strategic marketing and eDiscovery issues.

Attendees will receive CLE credit. For more information, click here.





Bone McAllester Norton PLLC is a full-service law firm with 38 attorneys and offices in Nashville and Sumner County, Tennessee. Our attorneys focus on 17 distinct practice areas, providing the wide range of legal services ordinarily required by established and growing businesses and entrepreneurs. Among our practices, we represent clients in business and capital formation, mergers and acquisitions, securities matters, commercial lending and creditors’ rights, commercial real estate and development, governmental regulatory matters, commercial litigation and dispute resolution, intellectual property strategy and enforcement, entertainment and environmental matters. Our client base reflects the firm’s deep understanding and coverage of today’s leading industry and business segments. For more information, visit www.bonelaw.com.

Is it OK to Google a Client? Of Course It Is. I'm Probably Googling You Right Now.

The American Bar Association Journal recently posted an article called "Is it OK to Google a client?" The story compares the act to a physician searching for information about patients online, which the story suggests is a violation of the patient's privacy expectations.

Frankly, I was a little surprised at this article, because: (1) it's the 21st century; and (2) when I get a call from a new client or a lawyer referring me work, the first thing I do is google them. Sometimes, I run the searches while I am talking to them on the phone.

Why? Because, as a lawyer, you are an extension of the client. A quick google search reveals their business page, news stories about them, and a general sense of "who they are." By hiring you, a client asks you to advocate for their position. Wouldn't it be relevant to see who it is that you're going to stake some part of your professional reputation on?

Let's be honest, the number # 1 test for a prospective client is "Is this a Crazy Person?" (Closely followed by: "Can this client pay my fees?")

Once you represent them, it'd be malpractice not to have googled the client. What if the client was making statements online (or posting videos or photos) that have a direct bearing on their case? If you don't find it, you can be sure that opposing counsel will.

Speaking of which, don't think for a second that I don't google opposing counsel and/or opposing parties. In fact, one of the best items a creditor can obtain on a credit application is an e-mail address, which I've called the 21st century fingerprint. Google, Facebook, Linkedin, and Twitter are all fair game.

What a strange article for the American Bar Association. I'm going to google the author now.



Time is On Your Side: 4 Tips for Collections in a Recovering Economy

By David M. Anthony

Despite the constant reports of rising foreclosure rates and bankruptcy filings, the news world was abuzz last week about the report from the National Bureau of Economic Research (NBER) that the Great Recession had ended…in June 2009. This surely came as a surprise to loan officers and small businesses everywhere who are seeing their fair share of loan defaults and increasingly uncollectable accounts receivable.

Anticipating this response, the NBER explained that, while the economy had not yet returned to operating at normal capacity, the worst was behind us. While this good news doesn’t put money into hands today, here are some things any creditor should bear in mind while we wait for the economy to fully recover.

There’s time to be patient.  In Tennessee, the statute of limitations for collection on an unpaid debt is six (6) years, pursuant to Tenn. Code Ann. § 28-3-109. Then, once you sue and obtain a judgment (within six years from the date of the default), your judgment is valid for ten years, pursuant to Tenn. Code Ann. § 28-3-110.  Plus, if your judgment remains unpaid at the end of the ten years, Tennessee judgments can be renewed pursuant to § 28-3-110 for another ten year period.

Don’t wait to act.  In some instances, it may make sense to take no action on unpaid debt. Maybe the customer is a company that has gone out of business and has no remaining assets, or maybe they’ve filed a liquidation bankruptcy.  This is where you make the “don’t throw good money after bad” decision and possibly decide to write this debt off.

But, remember, the first creditor to obtain a judgment is the first in line to seize assets. Granted, you could be the first in line and discover there are no assets, but you should nevertheless record your judgment as lien in the real property records. For less than $25 in filing fees, a creditor can record a certified copy of its judgment in any and all Tennessee counties where the debtor owns real property, and that judgment becomes a lien on any real property owned by the debtor.

Even if they don’t have any equity in their property today, the situation could well be different in ten years (judgment liens remain valid as long as the underlying judgment is valid). What’s more, your lien’s reach will capture any real property they obtain during the life of the lien. In the end, sooner or later, your debtor will have to deal with you, whether it be as part of a purchase of new property, a sale, or a refinance.

Bend, don’t break. Sometimes, it’s important to recognize when a debtor truly lacks any assets to pay toward your debt. When this is the case, aggressive collections—whether it be seizing a work truck or all funds out of a bank account—may put that debtor out of business and, possibly, into a bankruptcy filing. A judgment creditor can take depositions and request financials from their debtor, and this information may assist you in determining whether they aren’t paying anybody…or just aren’t paying you.

Bankruptcy doesn’t mean the process is over.  If your debtor does file a bankruptcy case, there’s still a chance of monetary recovery. In addition to the benefits to the debtor, the secondary point of the bankruptcy process is to maximize return for creditors prior to granting the debtor a discharge of his or her debts. But, in most instances, a creditor in bankruptcy only receives pennies on the dollar in the process.

Keep in mind, however, the success rate in Chapter 13 bankruptcy cases (where debtors repay a percentage of their debts over 3 to 5 years) can be as low as 20%, meaning that most of those cases end with a dismissal. A dismissal is good for a creditor, because there is no discharge of the debt. Instead, the full amount remains due and owing. Debts are eliminated only when debtors receive a “discharge.” That’s an important distinction to know.

Finally, remember that a bankruptcy discharge only discharges “debts”—not “lien” rights. So, if you’ve already obtained a judgment and recorded it as a lien, then your lien on the debtor’s property survives the bankruptcy discharge. As a result, even though you can’t collect your debt, you can enforce your lien in the event of an attempted sale or refinance.

In the end, collection is a process that rewards the patient, especially in a recovering economy. But, a successful creditor must be prepared, and being prepared means having a valid judgment in place and exhausting all enforcement remedies before giving up. We all hope that the reports are right, and, if they are, the steps you take today will help make sure you’re paid in the future.

David M. Anthony practices with Bone McAllester Norton PLLC in the firm’s Creditors’ Rights practice group, and he regularly writes about issues impacting bankruptcy, judgment collection, and lien litigation at his blog, Creditors Rights 101, www.creditorsrights101.com.