I always go for a monetary judgment along with an eviction, should the need arise. The eviction always goes a lot smoother than the collection efforts, obviously, but I was wondering if these judgements have any monetary value. Over the years I have accumulated a few and was wondering if anyone has any ideas on collections. At this point, anything I get would be a bonus!
Collection companies have no teeth. Think about you already have a judgment against the tenant.
All a collection company is going to do is mail one letter and then call over and over the phone number to harass them. The former tenant then gets a "cease and desist letter" to send to them and by law they have to stop.
A judgment company will usually split the proceeds 50/50. They will go after wage garnishment / bank levy etc.
Before taking your case on and spending time they will want to see the file of your former tenants. If they are currently judgment proof the judgment company will not want to work on the file. If the claim is large enough and the tenant seems collectible on some level they might take it on. If you want them to buy it out from you with cash upfront then you are looking at maybe 10 to 15 cents on the dollar amount of total judgment IF the past tenant is collectible.
The judgment company will tell you that it can take years through the courts to collect anything and at anytime the person can file BK and wipe out the judgments. You can also just sit on the judgment and hope one day the past tenants life changes for the better and that they want to clean up credit and make a deal.
No legal advice
Splitting the proceeds 50/50 is worth not having the hassle, but 10 cents on the dollar for a collectible account is crazy! As you said, if it was collectible, I would have tried to! Funny story about what you go through to collect a debt. Actually found and successfully served a garnishment on a restaurant manager-he quit!
I've never had any luck with collection agencies period! But I am a believer in those judgments and in some states they are renewable. I have a handful of them and I have had 2 of them call me to settle because they were cleaning up their credit. 1 of them had actually paid me a few years back but I neglected to release the judgment, I promptly took care of it when he contacted me and was very appreciative. So I know they work... if the person decides to get a life someday.
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