Post Judgement Collection

Woman worried about rent

4 Strategies to Collecting Post Judgement

Jan. 25, 2020

Unfortunately, it is no uncommon for landlords to get burned by non-paying tenants. The process of filing a claim and heading to court is exhausting, but can be rewarding if a judge rules in favor of the landlord. The problem: it is up to the landlord to collect on that judgement. Ideally, the ex-tenant will pay up and end the whole messy process. On the other hand, why would a historically non-paying tenant break his or her record by immediately settling the debt? Things could go either way, however landlords finding themselves in the position of having to collect a past-due debt are not completely without hope. In fact, there are four different strategies to choose from when attempting to collect past-due rent and court fees:

1. Say, "please".

This particular strategy seems completely useless, however some tenants respond well by simply handing over the money. State a date by which you expect to receive payment and don't fail to mention that you will send him or her to collections if they do not make payment. Again. Most renters fear what a collections process will do to their credit, which is likely already less than desirable. A poor credit rating makes it difficult to rent future apartments/forms of housing. Don't be surprised if the ex pays up out of fear of winding up homeless. This could work!

Related: Winter Evictions: Are they legally possible?

2. Garnishment

Wage and bank garnishment is always an option for the especially stubborn, non-paying ex-tenant. This process is not all that difficult. You simply make a visit to the courthouse and request a garnishment order. This order is sent over to the ex-tenant's place of employment or financial institution. The employer will honor the order by withholding up to 25% from each check until the debt is settled. You can repeat this same process if you prefer to go after the debtor's bank account. Of course you'd need the banking information, so that might not be an option. You can, however, refer back to paperwork he or she filled out during the initial rental process or refer to canceled checks if available. If not, consider who the tenant might have paid with a check and go from there.

Related: U.S. Continues to Challenge Landlords

3. Go back to the courthouse.

A common problem consists of not having a clue where the tenant works, if they work and if the employment is "legal". The solution: ask the court to perform a "debtor's exam", at which case the ex-tenant would be summoned to the court to answer questions or required to fill out info regarding banking details and employment.

4. Send them to collections.

Unfortunately, it will cost you to utilize the services of a collection agency, but at least you will receive some payment rather than nothing at all. This really should be a last resort for landlords as collection agencies are not always effective and it would be worth the research to locate a reputable agency if you intend to move forward with this process. In addition, it is wise to consult an attorney, CPA or financial expert prior to making this move as they likely have great recommendations for reputable agencies.

Remember: you have five to twenty years to collect based on state-specific laws.

Related: What Does Flager's Fair Housing Proposal Mean for Landlords?

For more information, contact Innovative Property Solutions today!

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