It’s MY MONEY and I want it NOW!

86 Replies

Anybody here have any success stories retrieving money owed from previous tenants? 

One of my ex tenants left the house a mess, owes me a couple months of rent and a fee for breaking the lease early. We set up a repayment plan, but as of last week he begun ghosting me. I get sent straight to voicemail.

I’m leaning towards using a commission based collection agency. That or a straight gangsta..

Any tips? A guideline to follow perhaps?

Have you tried wage garnishment? I'm dealing with a tenant now how actually did 8k in damage, but I received a judgment for 5k when she didn't show up. I didn't do the full 8k b/c I missed a few things when I submitted. I sent her a text, no response. I'm going to do a certified letter this week. When she doesn't respond within the 7 business days I'm going to allot I'll sue for wage garnishment. I hope it works as there are limitations based on income, but they have to show up in court in order for them to qualify for the exceptions here in Florida. I'll check some references I have to see if it is meaningful to you. I see you're in Dallas. I've got a few tasks, but will come back to this in about 30 min or so. 

@David Clay thanks for the insight. No I haven’t tried anything just yet. It’s been a week since I stoped hearing back from him. But wage and/or tax return garnishments sound ideal. I’m afraid of loosing even more money by contacting an attorney though. Is that the first step?

Sorry.  You're in Texas. No wage garnishment here.  Collections are near impossible, especially when tenants are broke (which is the most likely scenario with your tenant).  You can waste time and energy pursuing in court but chances are not good of collecting.  Just take the lesson learned and move on.

@John Chapman that’s what I heard from a family friend who attempted to take his tenants to court. He got nothing out of it and lost more money. Would you also advise against using a debt collector service such as “Southwest Recovery”. They’re pretty huge, based in Dallas and don’t charge anything up front. (I just heard of them tonight)

@Ivan Loza For dead files w/ little chance of collection, I send them to a contingency based collection agency. The hope is that some day at least one of them will want to buy a house or car or clean up their credit, and will pay something towards the debt. In a couple instances they were able to collect a partial payment. But unless you're dealing with class A tenants, you're going to be out of luck 9 times out of 10. Nonpayment of rent/damages is par for the course in the C class space in many states where your tenants are essentially uncollectable...hence the high COCR of these properties on paper.

@Matthew Olszak yes the agency I’m considering is a contingent based collection agency. And frankly I don’t care much what percentage they keep so long as the guy doesn’t get away with it. But yeah, I have a feeling that his inability to hold a job + long list of dependents = me not getting a buck.

OK, I think all wages in Texas are exempt from garnishment, but you may consider a non-wage garnishment (bank levy) and possibly go after any bank accounts or personal valuables such as cars, but I would imagine that the court would limit your ability to take someone's vehicle especially if they use this as their primary source of transportation. You could also request a  motion for discovery to help you in the execution of any levy allowed by the court. This may be too complicated for non-lawyers. I tell all of my tenants, few though they are, that I go after all money. The truth is that the courts work against you. In my case I just learned that Fl exempts all heads of households, but I can go after a levy. Go figure. Irritating. You can't steal from Wal-Mart, but you can take my rent money or damage my property and I have no real recourse. Sigh. 

Originally posted by @Ivan Loza :

Anybody here have any success stories retrieving money owed from previous tenants? 

One of my ex tenants left the house a mess, owes me a couple months of rent and a fee for breaking the lease early. We set up a repayment plan, but as of last week he begun ghosting me. I get sent straight to voicemail.

I’m leaning towards using a commission based collection agency. That or a straight gangsta..

Any tips? A guideline to follow perhaps?

My success on the $15k owed to me in damages and missed months was an email the length of a dissertation with a list of excuses including mold (nope, $800 of testing confirmed, they had a pet peeing on the carpet creating a bad smell) , _______'s cancer which came and went quickly, "having kids is hard", 1 of them starting college, and then an expected disappearance. I knew it was coming but prioritize being the bigger man in these blaringly obvous cases. I was annoyed for a minute, then renovated + rented out and it's history. Lesson was to serve eviction notices with multiple options for more affordable relocation. 

I don't know if this would apply in TX, but it's usually cheap to file a claim in small claims court.  In CA, it's only around $50.  You do need to be able to serve them, but if you don't have a real address or job address you can serve them at, you could hire a process server to find them and serve them.  Then, if they don't show up, you automatically win, then you can get a judgment.  And if they do show up and you win and they don't pay, you can get a judgment.

I'd personally go through all of the hassle of getting a judgment just so they don't get away with it, as you mentioned.  In my experience, most landlords don't check previous landlord references - or - tenants just don't put you down as a prior landlord.  But, most landlords do pull credit checks and if there's a collection from a landlord that says it all and it should affect their ability to rent from any decent landlord for a long time.

It was my understanding that collection agencies want proof of the debt, such as with a judgment, when it came to landlord claims, but I've never had to deal with this, so I don't know for sure.

@Ivan Loza

Straight up gangsta lol priceless...I live in NJ and let me tell you I wish I had a good answer but to me it sounds like you just have to take the hit and be more careful who you put in your rental, plus maybe up your inspections from quarterly to monthly.

Hope it works out, but don't focus on the now, look 5 or 10 years from now. Will this have been worth it....maybe go on social media and put a warning to other landlords about this tenant in your area.

@Ivan Loza first step is take them to small claims court to get a judgement in your favor. Then you can pass it to a collections agency who will take most of the money they collect, but something is better than nothing.

A judgement will stay on their credit report, so if they ever want to fix their credit, they need to pay the judgement. Some people get on a better path and actually pay off old judgments so they can buy a house. Landlord judgments can also make it hard to rent in the future, something worth reminding them as a reason to work with you to pay the debt...

Another option is offer them a cash settlement verbally for a tiny portion of what is owed. Let's say they owe $5000, maybe you offer $700 cash to settle it. It sounds bad, but it is better than nothing which is what you are probably going to get. Make verbally as a "if I could do it, would you consider". 

This is called "bad debt" and is unfortunately the cost of doing business in this industry.

The fact that you think a collection agency is gangsta shows your lack of experience. It is very, very difficult to get any money out of an old tenant. I have about 30 collection accounts and two of them have paid in full. Both of those were for less than $600. I have a few more that have made small payments or had small wage garnishments of $20 - $50.

An ounce of prevention is worth a pound of cure.

The best thing you can do to protect yourself is to have solid policies in place and enforce them. Rent is due on the first. Late fee charged on the 5th. Eviction starts on the 10th. Court has them on the street by end of month. That's my policy, I stick to it, and I don't let tenant debts build up much higher than their deposit can cover.

If you have not already, send one more letter, stating that if the payment plan is not adhered to by such and such date then it will go to collections (provide a date).  Its probably worth another try via the payment plan.  The collection agency will take a big chunk. 

@David Clay yeah it is pretty irritating. Called a few courts today and apparently there’s nothing they can do because I don’t know exactly where he is residing. I’m end going to a debt collector agency so at least the debt shows up on his credit. Maybe one day he gets his **** together and decides he’s ready to make a big purchase then BAM where’s my money first?

@Sue K. I just spoke to a pretty huge agency. They just need a copy of the contract and other sources of proof such as our text conversations. At least now I’ll now he won’t be able to purchase a home or car under his name until behind paying me back

@Jorge Pimienta yeah I definitely learned a lesson as far as screening is concerned. And luckily the hit wasn’t hard enough to get me off my investment schedule. I decided I’m just going to let a debt collection agency handle it. The attack on his credit is good enough for me and hey if one day in the future I actually get a chunk of my money back then awesome

@Joe Splitrock unfortunately the courts turned me down since I don’t know where he is residing now. But yes, I plan on calling him utilizing a different phone today to offer him a settlement. If he doesn’t stick to it, I found a large agency that can put this incident on his credit report

@Nathan G. I wrote debt collection agency OR straight gangsta.

But yes what you described in the last paragraph is very similar to the policy I will enforce from now on. Good thing I know plenty of sheriffs