Author Archives: David Williams

Perfected Not Dejected: Protect Yourself Upfront as a Secured Creditor

To understand the importance of security interests, it is first important to understand the legal process involved when a lender does not have a security interest (i.e., is unsecured) in relation to the borrower. If a lender makes an unsecured loan and the debtor defaults, the lender must sue in court and obtain a judgment. However, this judgment by itself is worth nothing: suitable only for framing. Since the debt is unsecured, there is no specific property backing the debt, so the unsecured lender must obtain a writ of execution, which allows the local sheriff or federal marshal to seize upon any property of the debtor’s that can be found. If the debtor has filed for bankruptcy, the creditor will likely end up with nothing. As you can imagine, trying to recover on a bad unsecured debt can be an expensive, time-consuming and often fruitless exercise in frustration for the unsecured creditor.


Consequently, a lender will often require a debtor to agree to the creation of a security interest in order to protect that creditor. The security interest is the right of the lender to sell specific property in order to satisfy the debt should the borrower default. One of the most common security interests is found in a mortgage for real estate, but is also regularly seen in personal property transactions, both tangible and intangible. Tangible personal property includes cars, motorcycles, kitchen appliances and pretty much any movable physical property you can imagine. Intangible personal property includes things like accounts receivable, securities, and promissory notes. Generally speaking, the law of secured transactions is governed by Article 9 of the Uniform Commercial Code.


As a lender, making sure your debt is secured through the proper creation of a security interest often only gives you minimal protection. This is because the property referenced as collateral in the security interest may have been used by the borrower as collateral for other debts as well. In the case of a mortgaged real estate property, you will often see many secured interests: a first mortgage, a second mortgage, a security interest in a fixture such as a swimming pool or a garage, or perhaps a judgment lien from a lawsuit the debtor lost. As a lender, understanding your relative priority against other secured interests in a specific property and maximizing your place in that pecking order will sometimes make all the difference between getting something rather than nothing out of a bad debt. That process of enforcing your security interest against other creditors is known as perfection. Perfection involves putting the rest of the world on notice that you have an interest in the debtor’s asset. Continue reading

Demystifying the Life Cycle of a Lawsuit for the Pro Se Litigant

You have decided to sue somebody. It may be a breach of contract dispute, a divorce, an action against a debtor, a suit for child custody, or a claim for negligence or some personal injury. Perhaps you have tried to resolve the dispute out of court by negotiating with the other party or by going through an arbitration process. Unsuccessful, you have decided to sue the person or company in court.

What to do next? If you have the financial resources you may decide to engage the help of an attorney who will take the case for you. In an arena where success or failure can have big consequences, hiring a competent attorney may be some of the best money you will ever spend. However, times are tough and hiring an attorney may not be feasible for many would-be litigants. You may decide to handle the case on your own. Although the authorized practice of law is limited to individuals who are admitted to the state bar, the law does permit an individual to work his case pro se, or for oneself. This article attempts to lay out the different parts of a lawsuit for the pro se litigant in the hopes of making this journey a little less daunting. This article should not be taken in any way as legal counsel or advice. Instead, it merely describes the different parts of a typical civil lawsuit as an aid to pro se litigants in their own planning.

Investigation

Before you sue an individual, a company or some other legal entity, you have to make sure you have sufficient evidence to prevail on your legal argument. Sometimes, this is very simple. Perhaps an absolute divorce in your state requires being physically separated for a year. Maybe you have a registered trademark or patent that gives you a presumption on the evidence. Perhaps you have a case that requires engaging the help of a private investigator. Regardless, you will want to make sure that you have “the goods”, or evidence, to successfully support your case. You will need to make sure your evidence is relevant to your legal claim. Continue reading