Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
I couldn't find one on the web or in the files on BP. Does anyone have an off-the-shelf list of ramifications for an ex-tenant who doesn't pay the judgment? I want to include something like that with the letter I'm about to send to a former tenant in order to stimulate some dialogue about paying.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Trying to scare or intimidate or threaten or coheres a debtor can be construed as unlawful collection practices, by phone or in writing. Counseling in good faith might be accomplished, but I wouldn't go there. Telling their auto insurance will go up due to a judgment can be walking on thin ice. :)
Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
12y
There's got to be a list of "facts" out there. I'm just sending a letter to the ex-tenant (the first letter since the judgement a few weeks ago) to lay out the total amount owed, how to contact me and that I'm willing to work with him, along with copies of all the invoices for damage etc. I thought it would be nice to include a one-page document explaining what a judgement means to someone it is levied against because I don't think the tenant left the court house understanding. I have no intention of sending him a "I'm going to destroy" you letter.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y
I could use some guidance too for collecting after a judgement. Writing a good demand letter that will motivate a current or past tenant to pay up is an art.
Collection agencies can help in some cases, but I've learned if the judgement is not in the thousands they won't put many resources into it and the chances of their collecting from someone who doesn't care about their credit is minimal.
Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
12y
Yeah, I agree, Marcia. This one is for under $5,000. Perhaps I'll just send this and then if I get crickets in return, I'll pursue other legal channels or just let it ride for 10 years at the 8% interest and then renew it for another 10 years. Perhaps if he wants to one day do something financially, he'll realize he needs to pay first.
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
12y
If you know where the tenant work at get a process server to hand delivery the demand letter to him/her and do it when all his or her friends are around, and that will get his/her attention. Before someone speaks this is not illegal.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
I understand what you're saying, send the other information. Simply tell them that you're willing to work with him in clearing up the matter to release the judgment that can have a negative impact on his credit and may increase his costs in conducting consumer business in the future. Use words like can and may or could, not will, shall, would.
What I suggest is you not go there, you're not a collector, what you say can hurt you even if it's with the best intentions.
He may have walked out thinking he knows how hard it might be to collect and doesn't care too.
It's better to turn judgments over for collection, the cost od collection might be less than you'd settle for with him.
A debtor has many tools in the box to use against a creditor, you can't just use logic or opinions in collections as they may take anything and use your collection efforts against you. I wasn't implying you were trying to hound the guy but you're not a credit counselor either which is why I suggest you not go there. Just send the facts supporting the amount owed and a demand or an offer in compromise without other stuff attached to influence him. :)
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Originally posted by @Account Closed:
If you know where the tenant work at get a process server to hand delivery the demand letter to him/her and do it when all his or her friends are around, and that will get his/her attention. Before someone speaks this is not illegal.
Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
12y
a straight forward conversation about what you expect and how you can work with them to resolve the collection works best IMO. The conversation will dictate if you need to bring up any facts or not
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
I just got rid of nonpaying holdover tenants last week. I offered cash for keys and they refused. I then filed the unlawful detainer case. When they called I told them my intent: to turn my writ of execution over to the sheriff in order to proceed with a lockout. AND to record my money judgment in both counties where they work and live. I said matter of factly that the court case and judgment would be public record of the eviction and non payment of rent. They called 3 days later, ready to move and accept cash for keys if I would release the case, which I did.
I see no problem sending a letter and letting the previous tenants know what your plan is. Don't spell out the consequences, as you can't know what they are and it could be perceived as threatening. I'd send a letter saying you are intending to record the judgment you received (and attach a copy), and that you will use all collection attempts allowed by law. Let them decide if they want to deal with it or not.
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y
I just googled "how to collect debt" and found some good information on line.
How to collect debt
How to collect debt from tenant
How to collect debt from a customer
How to collect debt after judgement
If you type the name of the state after one of these, there will be state specific information available. As always with the internet, consider the source.
Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
12y
What about garnishment? In my area you can file a garnishment once judgment granted..(difficult if no longer working or job change)...#1 reason I require good work history(stability)..
example 1..collected all monies from enforced garnishment(paid thru employer)
example 2..tenant payed outstanding balance before garnishment enforced bank notified, tenant called and processed direct pay...
Of course most times, I never pursue unless balance $500+
Involved In Real Estate · Potomac Falls, VA · Member since 2012 · 203 posts · 31 votes
12y
I think @Bill Gulley 's advice is really worth heeding here. I feel I am running a business. There is no emotion to it whatsoever. Well, that's almost true. I feel that if my attitude is getting fired up by anything in my real estate business, then I am doing something wrong or perceiving things incorrectly. My previous tenant is not a bad guy. I have had professional tenants before, and I wish them well in life, even though I know it will be a difficult one to come to grips with down the road for them.
For now, I'm sending my letter to the previous tenant that lays out all the charges with attached documentation. I've added that I would like them to contact me by X-date to discuss options and that if I do not hear from them by X-Date, I plan to escalate this through proper legal channels. More importantly, I informed the tenant that I am happy to work with them in this matter, but I can only do so if we open up lines of communication.
In a way, I view this as partially my fault. Although the lease parameters were communicated clearly in the lease agreement and verbally while signing, he clearly did not understand them as well as most. This is a learning opportunity for me.
If he was a bad, vindictive person, I would still send this letter and would follow the same procedures. It's just business.