Collection agency?

12 Replies

I have evicted a tenant got a judgement from the court. I know I probably wont have any luck but is it worth it to turn it over to collection agency if they can collect anything?

How do I find a collection agency that will do it for free and just take a % of money collected. I never had to do this before...

Thanks

We use Southwest Recovery, I believe they are located in Dallas. We have actually had some luck with them getting money for our clients. Which is very rare

In general you won't get much unless they have something.  You have to determine what is the quality of person you are trying to collect from.  They may decide to buy a house or get a job of high enough quality that they do a background check on them and they need to get the judgment released in order to qualify.  In either case a collection agency won't help.  Now you can check with your local state laws and if you can garnish their wages a lawyer may be of help but a collection agency won't help.

Contact some collection agencies that operate in your market and see how they operate. All the ones I've called will get a percentage of what they collect and don't charge anything more. That said, they have more incentive to chase big accounts and those of debtors who have significant assets to protect. 

The collection agencies report the debt to the credit bureaus.  The bad mark on the debtor's credit is sometimes enough to encourage a person to eventually make good on their debt. It also is there for other landlords to see, so it can benefit others in our industry. When the tenant moves across town or out-of-state, their credit history follows them. The fresher the debt, the more easy it is to track and collect. Legal records can be harder to examine the further away a tenant moves or the more time that has passed, making them easier to miss. So I like having the judgement noted in both the legal record and credit record. Good luck.

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@Jimmy S. I'm in the same boat and am looking into www.rentrecoveryservice.com. They do either a flat fee or contingency, your choice. And, you can change over from flat fee to contingency if you want. They will also submit to the credit bureaus (but you have to have the tenant's SSN to do that). I think I read on their website that they use NCOA so you can continue to have the notices sent to their new addresses when they move. 

I doubt I'll ever get my back rent and damages back either, but I figure if they ever get their lives back on track or they win the lottery :-) I'll be in line to collect. It also puts them on notice that they can't do this to other landlords and get away with it without being dogged. With the problems they have, any landlord doing a criminal or credit background check on these low-lifes won't touch them. Sadly, the landlord I inherited these tenants from didn't do those checks and I got burned because of it.

@Jimmy S.  Jimmy - I know this is an older post, but did you ever have any luck with using a collection agency?

My personal experience is that I've never had luck with a collection agency.  I've just done the work myself: get a judgment, file to have wages garnished, place liens on any property they may own (I've had some people come up as being on joint title on a property).

Some people will sent up a payment plan as soon as the sheriff shows up to serve them with papers because they're so embarrassed! Probably 50/50 odds you might get money back going that route.

- Tom

Originally posted by @Tom S. :

@Jimmy S.  Jimmy - I know this is an older post, but did you ever have any luck with using a collection agency?

My personal experience is that I've never had luck with a collection agency.  I've just done the work myself: get a judgment, file to have wages garnished, place liens on any property they may own (I've had some people come up as being on joint title on a property).

Some people will sent up a payment plan as soon as the sheriff shows up to serve them with papers because they're so embarrassed! Probably 50/50 odds you might get money back going that route.

- Tom

 Hey Tom

Honestly I never even called the collection agency to try to collect the debt, mabay I should, but from what everyone tells me its mostly a waste of time, especially if they have nothing.

I was just thinking about hiring a collection agency as well. We tried doing one of those flat fee letters and then put it on the credit report services, it's been a year and no contact from x-tenant. The x-tenant managed to move again and get a new car just this spring, so no motivation to pay us since it's apparently not crimping their style. I was just looking in our county's online court docket and see a company based in our area called something like Rent Recover handling plenty of cases, so I was going to check it out and see if maybe they can do something.

So I just called the collection agency mentioned above, they only work with companies that have 100 or more units. I asked if they could recommend an agency that would work with a smaller outfit and they didn't; the others they knew of have a 100 property minimum.

If any of you are still looking, the National Creditors Bar Association (NARCA) has a law firm directory search. They also have a buyer’s guide that lets you search by the specific service you need.

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