Practice area
Collections
Meridian Law's commercial collections attorneys help businesses recover money they are owed, from filing suit to obtain a judgment to collecting it through garnishments, liens and levies. We work from Franklin, serving Nashville and Middle Tennessee.
Collections overview
From an unpaid invoice to a judgment
When a customer or business will not pay, a formal demand letter sometimes resolves the matter. If it does not, the next step is usually a lawsuit to obtain a judgment, filed in General Sessions Court for smaller amounts or in Circuit or Chancery Court for larger ones. If the debtor does not respond to the lawsuit, a default judgment may be available; if the amount is disputed, the case proceeds like any other civil claim. Our litigation attorneys handle that case.
The contract behind the debt matters. Terms on interest, late fees, attorney's fees and where disputes are heard can change what you can recover, so our contracts practice often reviews the paperwork first.
Collecting on a judgment in Tennessee
A judgment confirms you are owed money, but it does not pay you. Tennessee law provides several ways to collect it:
- Garnishment of wages, or of bank accounts and other funds held by third parties
- Judgment liens on real property the debtor owns
- Levies on the debtor's other non-exempt property
- Enforcement of judgments from other states, which can generally be registered in a Tennessee court
Some property is exempt from collection, and each tool has its own procedure, so a collection plan usually starts with finding out what the debtor owns.
Timing matters. Debts become harder to collect as they age, limitation periods keep running, and other creditors may reach the debtor's assets first. If an account is past due and the customer has stopped responding, call us to discuss your options.
Liens for unpaid construction work
Contractors, subcontractors and suppliers who are not paid may have lien rights against the improved property under Tennessee law. Notice and filing deadlines are short and depend on your role in the project, so it is important to act promptly. We have written about related issues in Caveat contractor: no private right of action for unpaid general contractors and the Construction Industry Payment Protection Act of 2020.
FAQs
Collections: common questions
How do you file a mechanics lien in Tennessee?
The process depends on your role in the project. A contractor who dealt directly with the owner generally has different notice and recording requirements than a subcontractor or supplier, and residential projects can have additional rules.
In general, it involves serving any required notices, recording a sworn statement of the lien with the county register of deeds within the statutory deadline, and filing suit to enforce it if needed. Missing a deadline can forfeit the lien.
What is the statute of limitations on debt in Tennessee?
It depends on the type of debt. Claims on contracts, including many business accounts and promissory notes, are generally subject to a six-year limitation period in Tennessee, while claims for the sale of goods are often subject to a four-year period under the Uniform Commercial Code.
The clock usually starts when payment was due. Check the deadline for your specific debt before deciding how to proceed.
How do you put a lien on property in Tennessee?
For a creditor with a court judgment, a lien on the debtor's real property is generally created by recording a certified copy of the judgment with the register of deeds in the county where the property is located.
The lien can make it harder for the owner to sell or refinance without paying the debt. Other liens, such as mechanics' liens for construction work, have their own requirements and deadlines.
Can you collect an out-of-state judgment in Tennessee?
Generally, yes. A judgment from another state can usually be registered in a Tennessee court and then enforced like a Tennessee judgment, including through garnishments, liens and levies.
Registration has specific filing and notice requirements, so it needs to be done correctly before collection begins.
Contact Meridian today
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