Info on Collection Companies

3 Replies


I am seeking info on Collection Companies. I have heard that they can persue contractors that have not held their end of contracts and done poor job. Anybody have experience with these companies?
Is it better to go this rout or better to file a court suit against a contractor and hope to get money back this way?
Any thought and info on this matter will be helpful, especially from people that have actually gone through this kind of proccess....


The two are not mutually exclusive. In other words, it’s not a matter of court OR a collection agency because even if you go to court and win, you still have to collect. And that is usually the hardest part. 

Contractors and tenants are both notoriously difficult to actually collect from and many people will advise you not to waste your time as your chances of collecting are slim. I think you just have to evaluate the amount of money potentially at stake, your likelihood of collecting, and whether or not it’s worth it to you personally. 

I’ve only had to take one tenant to court and many people would have thought this tenant was uncollectable, but I ended up winning the court case AND collecting all the money (approx $6k) owed to me. So it can be done. 

Contractors can be difficult though, especially if they’re unlicensed or operate primarily with cash clients or have a business entity/name they can easily close down and then just re-open under a new name. 

Lastly, it looks like you’re out of the country, which could pose some logistical issues with going to court, or at least add to the cost of doing so. So that’s something else to take into consideration.

Hope it works out whatever you decide. 

Hi Kyle,

Thanks for the input. 

Have you heard of people that have tried to collect through Collection Companies?

This particular one we talked to wants up to 45-60 days to collect and want 20 percent of anything they achieve to collect. They get paid only if we get paid...

The amount we are after is quite substantial so it is worth our while, and like you said, if we go through a court instead, we will still have to collect. If there is any money to begin with...

On the otherh hand,We have heard that only a lawsuit starts getting peoples attentions...

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I haven’t used a collection agency. I used the wage garnishment process and was able to collect that way, but that requires a court order and isn’t available in every jurisdiction. 

I don’t see the harm in trying the collections route. From what I’ve read in other posts, there’s not a very high success rate with it, but if you only pay if they collect, what can it hurt? Plus, a 20 percent fee sounds pretty fair. I’ve seen others charge double that. 

If it doesn’t work, you still have the court option available to you. 

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