Collection of money without a formal eviction

9 Replies

I've never had this problem, but I'm sure one day I will.  

Has anyone used a collection agency to get unpaid rent/fines/damages etc without going through an eviction process?  if so, how does it work?

Originally posted by @Bryan N. :

I've never had this problem, but I'm sure one day I will.  

Has anyone used a collection agency to get unpaid rent/fines/damages etc without going through an eviction process?  if so, how does it work?

 Well, it depends a lot on how much your tenants care about their Credit Score.

Sadly most Collection Agencies I've worked with tried to "make a quick buck" meaning use scare tactics to make the tenant pay before formal litigation. I've had tenants which I ultimately evicted that cared less about that. They will contest the debt and most likely you will end up needing a Judgement which you then hope to enforce later (good luck).

The main leverage you have in your desired scenario is Posting negative item in tenants Credit Report and hope they care. Been there done that, and I learned that if your tenant doesn't get scared of the 5 day letter and the letter after that you started eviction process, they won't care about their credit much either. So you will end up evicting which is another 30-60 day process depending on how backed up is your local courthouse.

Also eviction costs are added to tenant account so generally I started the eviction within 30 days of delinquency (most judges will throw you out of court if you file under 30 days lol).

I get a judgement and execution and contact the local constable.

After a month or two, if they don't pay they get summonsed to a payment hearing.

If they don't show, now the constable threatens to arrest them if they don't pay.

Just collected 5k judgement doing this.

Good luck

@Bogdan Cirlig  

Ok, for clarification and hypothetical... Tenant skipped out in the middle of the night and owes rent, fees, damages etc...

How would you post the item in their credit report?  If I can't collect at least I can let the next landlord know. 

Do you just contact the collection agency prior to any formal court precedings?

Originally posted by @Eric Bowlin :

I get a judgement and execution and contact the local constable.

After a month or two, if they don't pay they get summonsed to a payment hearing.

If they don't show, now the constable threatens to arrest them if they don't pay.

Just collected 5k judgement doing this.

Good luck

 Whoa, teach me how to do that. I hold 20k in various judgement and I can't enforce them. What do you mean Arrest them? Can they do Jail time for unpaid Judgement?

Originally posted by @Bryan N. :

@Bogdan Cirlig 

Ok, for clarification and hypothetical... Tenant skipped out in the middle of the night and owes rent, fees, damages etc...

How would you post the item in their credit report?  If I can't collect at least I can let the next landlord know. 

Do you just contact the collection agency prior to any formal court precedings?

You as a person can NOT post to their credit unless you have a business relationship with either Credit Bureau. (separate app with them). A Credit agency can because they are already in a reporting relationship. It costs them few bucks to report an occurrence.

 If tenant Vacated you can NOT evict them unless they left "substantial presence" behind such as personal items, clothes etc. It's a VERY crappy situation. If the property is empty is you can (and should) take immediate possession and change locks as it saves you from mandatory eviction later if they return. Have a witness with you (non relative).

You can use a Skip Trace Agent (aka Collection Agency) to locate your "asset" (tenant). If you know they have decent jobs and can recover after them, might be worth pursuing. If they don't have documented income or so, you're out of luck. Don't throw good money after bad one. From what you describe, tenants skipped town, I suspect they don't care about their credit either so you will have to file in court. You can sue them even if they left.

Again I'm not an attorney, you may want to consult with one.

@Bogdan Cirlig  

It hasn't happend.  It's a hypothetical situation.  I'm just curious how the process works. I prefer to get educated prior to something happening instead of as it is happening.  I wasn't sure if as a "landlord" not a business I could contact a collection agency to pursue the money. 

Originally posted by @Bryan N. :

@Bogdan Cirlig 

It hasn't happend.  It's a hypothetical situation.  I'm just curious how the process works. I prefer to get educated prior to something happening instead of as it is happening. 

 Yeah no biggie. Contact the Collection Agency, tell them you have a bad paying tenant you'd like to collect after. They will ask if you filed with the court, you say no, then they get going.

What they will do is to get documentation of the actual claim from you and the amount then they will start sending mandatory letters out to them (once they located where they live). They need to show proof that they've tried to collect for at least 30 days before taking further action, generally 45 days. After that, they will ask if you want to file with the court and you will need to pay upfront for the court fees etc. 

From there you end up with a Judgement against your tenants. enforcing it (aka collecting) is a different business.

@Bogdan Cirlig  

Very valuable info.  If I'm in the situation I would never count on receiving any money, but at least now I know a course of action that could potentially aid me and will effect their reports to aid other landlords if I ever need it.  

@Bogdan Cirlig  Well I can't speak for how things work outside of MA..But after given a judgement, they are expected to pay. You can request a payment hearing where the court evaluates the status of the payments. Here, the court issues a Summons to the defendant to appear at the payment hearing. Often, tenants skip court. Ignoring a legal summons IS an arrestable offense and they issue a civil warrant. 

Here in MA, a law enforcement officer will not enforce a civil warrant. Civilian constables DO have authority to arrest (i.e. "compel" a person to court). A good constable is basically a law empowered collection agency that dangles the arrest warrant over the person until they pay. People think "arrest" and think of being "booked and processed" with finger prints and pictures etc.. Often, the tenant does not realize the 'arrest' just means they get brought to court that day and forced to listen to a judge tell them to pay.

The good thing is all my court, attorney, and constable fees were legally added into the judgement along with 12% interest for the year and a half it took to work through the courts.

At least...this is how it worked for me the one time I've had to do it. 

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