Collecting old tenant debt?

Question

I have family who have or who have had rentals in the past. They do nothing to collect upon the debt owed by these lowlife tenants. I wonder this because 1 relative of mine spends a fortune every time she evicts someone. She actually pays to get the sheriff out, change the locks, clean up and then $3500 to a lawyer to get a judgement that seems pointless. I think she enjoys having destructive tenants just to watch them as a form of entertainment in her later years lol. She probably wont listen, but Im just interested in knowing if its possible for her to collect on some of her MANY cases of nonpaying tenants.

Has anyone had success in collecting upon old debts?

Do you you bother calling their new residence or dinging their credit report?

Can you sell the debt to a collection agency? And for what % is typical?

Has anyone had success in collecting upon old debts?

Do you you bother calling their new residence or dinging their credit report?

Can you sell the debt to a collection agency? And for what % is typical?

Steve Babiak · Answer

I agree with getting the judgment to make the deadbeat tenant more prominent to identify.

To add to what Stephanie Dupuis posted: one of the things you want to do as a landlord is identify all addresses where the tenant applicant has lived; these can come from a credit report, the application, the DMV, facebook, myspace, google - wherever.  Then you identify the owner of those addresses and make contact.  Bad tenants almost certainly have screwed some landlord at some time ... find out before that landlord being screwed becomes you.

Stephanie Dupuis · Answer

While I have no comment on why someone would rent to bad tenants, or expose themselves to that. If you do (or when you do) end up with such a tenant, I feel it's a duty to other LLs to file a judgment if possible. This shows up on records more easily and is (not always) but is more traceable. In our area, when we do background checks on tenants, evictions don't always show up (I always run names past our rental association secretary b/c she knows every bad tenant in the county). Judgments do. And, as stated, you can collect on a judgment or sell it. Clearly, this is not preferred to renting to a quality tenant.

Dawn Anastasi · Answer

Well then she's not "seriously" trying to run a business.

Kyle Clark · Answer

Dawn A.@Dawn Shes pushing 85 and has money. I used to live with her and have met some of her past and present tenants. A heroine addict, a person who removed their face, growers, dealers, mentally ill people, crackheads, drunks, parolees, a gay hoarder, a con artist Orthodox priest and all sorts of other low lifes. I think she enjoys creating drama for herself and playing the victim to live out some sort of soap opera lifestyle. She also routinely hires contractors then doesnt pay them after they do work for her. The security guards at the courthouse greet her by name when weve went if that tells you anything. Its her life, she can do whatever she wants. Why do you think I dont tell people in town Im related? Lol

Dawn Anastasi · Answer

I can't believe anyone who is seriously trying to run a business would actually do this.

Kyle Clark · Answer

Thats interesting, thanks guys. Im surprised with how low its worth to a debt collection agency, but I supposed tenant debt is bountiful. Most landlords I know dont bother with trying to collect and just say "you cant collect anything from people that dont have anything". This person I talk about though has been in the property management business for decades managing her properties and others. She told me she has all the papers from the past 30 years on deadbeat tenants, but doesnt do anything with them. She literally goes out of her way to pick the worst tenants, always rents to junkies and doesnt pull credit reports or anything. Like I said its entertaining to her to deal with these sorts of people lol. Even if she just got 1% of recent judgements Im sure thats a decent chunk of change. Ill maybe get some quotes and see what they say as far as % goes, this old lady always gets judgements too I think because Ive brought her to the courthouse at times.

Ned Carey · Answer

Yes judgments have value.  A good collection attorney may be able to garnish wages or otherwise get some money back. Selling the judgements may also be a possible route, although you will only get pennies on the dollar.

I see you are in CA, which generally has liberal laws so that may make collecting tougher.

Dion DePaoli · Answer

She can take the collection to a collection company.  Those firms will either purchase the collection or will partner with her to collect.  Obviously the price is severely discounted.  Old debts which have no collection activity will lose collection capacity sooner or later.  The collection company will walk you through all of it.

You could try and do this yourself but I personally would advise against it.  Debt Collection is a licensed event in most states and collection laws need to be known by the party working the collection.  Violations of said laws can result in fines.

On a general price indication the debt will likely sell for 1% or 2% of the balance.  That might even be a little high, it might be 0.5% or 0.25%.  It's been a long time since I priced any out.

If she actually has a judgement against the tenant, those are worth more as the judgement will allow the collection company to pursue garnishments and other legal remedies to collect.

Collecting old tenant debt?

Most Popular Reply