Sending Tenants to Collections

[Andre Davis]

Hello BP,

I have a tenant who I started the eviction process who recently moved out before the court date but left with a substantial balance. I’m wondering if it is worth it to send them to collections? And if so, what is the cost and prospect for collecting something, certainly not all, but something.

My thinking is that if it shows up on their credit, it may hamper employment, car purchases, rental applications, education funding, etc and at some point they would need to pay me to go forward with some major life steps over the next 10 years.

[Nathan Gesner]

Quote from @Andre Davis:

Collections are tough. I get something from about 30% of my collection accounts. Maybe 10% pay in full.

I still think it's worth it. The collection sits on their credit report, which may protect the next Landlord who runs a background check. It can disqualify them for a car loan or credit card. It can prevent them from buying a house. I had one tenant who wanted to buy a house, so he wrote a check for $3,200 to clear my collection off his credit report and qualify him for the loan.