I have won many judgements, but I have never collected one cent.... - Posted by Hope(Fl)

Posted by Laure on May 07, 2000 at 21:24:22:

What a great story ! I never thought of adding to their account so the check would clear !!!

I usually 1099 them the amount as additional income to them and let the IRS get my revenge for me ! hehehe

Laure :slight_smile:

I have won many judgements, but I have never collected one cent… - Posted by Hope(Fl)

Posted by Hope(Fl) on May 07, 2000 at 10:31:37:

A friend of mine had recently told me that she was thinking of ordering a course which would teach her different ways to collect the judgements that have been won in court, but never paid. Of course, she would charge a hefty fee for her services, and I think it sounds good on the surface, but thought I would come to this board to ask if anybody has ever heard of such a course, and what their feedback may be. Personally, we have won in court many times, and never collected a cent. I have tried to garnish peoples pay, but they just quit the job. As it seemed to be to much energy and time, I just gave up. But I know that I would gladly pay someone money if they could collect for me. What do you think?

Amen, I TOO have won many judgements, but I have collected on two… - Posted by David Krulac

Posted by David Krulac on May 08, 2000 at 05:45:47:

almost always have not collected, luck and persistence help.

  1. tenant skips out leaves a bunch of stuff, all salvation army type furniture. I get a judgement and find new address. sheriff goes to serve and inventory possessions for a sale. mostly low value stuff EXCEPT for a 1961 studebaker goldern hawk. it makes the inventory list and I get my money.
  2. tenant moves out i get judgement. as a member of the credit bureau i report the judgement, with documentation directly to the credit bureau. tenant tries to buy a car, they pull his credit, i get paid before he can buy his car. what a great country!
    David Krulac

Re: I have won many judgements, but I have never collected one cent… - Posted by David Butler America’s Note Network

Posted by David Butler America’s Note Network on May 07, 2000 at 20:09:34:

Hello Hope,

Yes, there are several courses on collecting judgements available, and I believe one of them is right here on this site. Don’t remember for sure, but I bump into them from time to time, and I received solicitations for them as well. I am also aware of several note brokers and other investors who have become active in buying judgements from folks who have been unsuccessful in collecting on them.

The collection industry itself has been around forever. The traditional method is a consignment arrangement. They take anywhere from 40% to 60% of whatever they collect, if and when they collect. Several of these companies also purchase bad debt, but usually at prices ranging from 10 cents to 30 cents on the dollar.

But you have hit the problem right on the head. You need to analyse the time and the energy, versus the reward of collection. In saying that, I often see people leave a lot of money lying on the table, or flushed down the drain, because “It just isn’t worth the effort!” Only once in awhile do I see the opposite… where a guy is wasting his time and his money, and loses even if he collects.

So you want to be sure that you are fair to yourself when you make these decisions. I can’t begin to tell you how many folks work for $10, $15, $20, and even $50 per hour day jobs, who routinely turn down very simple opportunities in their daily financial activities to earn $70, $80, $100, even $200 per hour for themselves!?! In this instance, I would say that it depends on what you earn right now, and what kind of judgements you have. If you rent property for example to people who were awful going in (bad credit, poor income history, many other problems, etc), chances are that judgement wasn’t much good before you bothered to go get it… in which case, if you can sell it for 10 cents to 25 cents on the dollar - well, you are still ahead of where you are now.

I have been very fortunate in chasing down my bad debt over the years, although I have had occasion to collect under some very unusual circumstances, and a lot of luck. I have had a sheriff blocking a tenant’s driveway just as they were sneaking out with all of their belongings in the middle of the day, and collect $500 from them before they could go anywhere.

I’ve had attorneys with garnishment orders sitting on a trustee’s doorstep after going through the effort to pierce a spendthrift trust, and serve the garnishment on the distribution days, to make sure we got ours. I had people disappear in the middle of the night, who accidentally left a whole storage shed full of antique furniture. I managed to get it seized before they could get back, and collected on one large judgement, but the second debt was still in the legal system.

They got the antiques back by paying off the judgement I did have… took another 15 months to track them down in another part of the state and get a garnishment slapped on them to collect on the second judgement… but wound up getting it all.

Had a guy give one of my employees a bad check for $800 to rent one of my vacation properties. Came in at midnight on a Friday and bank was closed for the Labor Day weekend. My gal took the check for his four night use of the property. On Tuesday, he was long gone, and it turns out the check was written on a closed account. After six months of trying to collect, we did give up, but we got lucky - in that the State of Arizona changed their bad check laws significantly. Almost a year after the incident, I called the District Attorney’s office, and learned that we could file a claim for the check under the new laws… four months later, we had the money and treble damages!!!

A lot of times, it’s a matter of due diligence, and disciplined effort. Sometimes, a little luck finds it’s way into the mix too. I have a handful of clients who owe me for consulting services rendered, who never paid, and disappear on me. I didn’t even bother trying.

What I did do, was take my written proof of the debts (including the contract agreements), over to a credit collection agency. Out of nine of those, I have received full payment on four of the accounts, and some dribs and drabs on two others. The collection agency took 50%, so I got something, with no effort. Their main weapon was simply to put a derog on the deadbeat’s credit report. When they needed the credit bad enough, they found the money to pay off their bills.


Posted by Soraya on May 07, 2000 at 13:54:27:

If you find the name of the course and where to buy it please post same. Property owners with multi unit residential or commercial properties would be very happy to have that information.


Sell the Course - Posted by PBoone

Posted by PBoone on May 07, 2000 at 11:20:58:

If you were to design and sell the course on “Collecting Judgements” you would make more money. Just market to the poor dumb person who is looking to the fantasy.
Your experience and every property owner trying to collect I have met has the exact same story. Your experience speaks for itself.

Two little stories - both will make you feel better !!! - Posted by JohnG

Posted by JohnG on May 07, 2000 at 13:12:07:

I can’t resist.
I, too, have had a real problem trying to collect on judgements from those deadbeat tenants that we love so much and bring such joy into our lives.

Here are two “gotcha” stories :
(1) this Rhodes scholar of a tenant leaves my place trashed owing 2 months rent. In his infinite wisdom he left me with some post dated cheques. On the 1st I go to the bank and present the cheque and cross my fingers and say (smiling)Is this cheque any good ?
“No”, the teller replies.
“What if I put in $50 - would it be good ?”
“No”, she replies.
“You need to put in $100”.(smiling)
So, I deposit $100 and the $800 cheque can now be cashed. I would have like to see this guys face !
Kidneys man !!!

Next story. My caretaker tells me of a tenant who has moved out and we have a judgement against him for $1,700. Good luck trying to collect.

My caretaker finds out that he has just sold a house (separation) just at that particular time and we spend $100 to register this judgement at Land Titles.
Three weeks later when Deadbeat tenant No 2 goes to his lawyers to pick up the proceeds of the sale - guess what - it is minus the $1700.00 - WE GOT IT!!

That was a great day and I made sure my caretaker got a real nice reward for that little bit of detective work.

So, it hardly ever happens, but sometimes it does.

Re: Two little stories - both will make you feel better !!! - Posted by Alex Gurevich, TX

Posted by Alex Gurevich, TX on May 11, 2000 at 20:35:57:

isn’t that a classic Nick Koon’s techniques from the
late 80s ?

Take it all and close the account - Posted by Branden

Posted by Branden on May 08, 2000 at 18:43:40:

I just did a similar deal with a bad check from Norwest/Wells Fargo. I called their automated 800# to verify funds. You enter in their account number and the amount of your check. It then tells you if funds are available. Unfortunatley you can only try once per call. I had to call back several times until I whittled it down to the penny. I had a check for $450, he had $260.51 in his account. I deposited $189.49 and cashed the check. The bank issued me a check which I handed back to them and cashed on the spot. I’m not sure if it happened in this situation, but I know at my bank if I withdraw all of the money from my account they close it.


#1 should be in the collection hall of fame!! - Posted by ray@lcorn

Posted by ray@lcorn on May 08, 2000 at 15:24:35:


Great story and a beautiful technique. I emailed this post to our collections and accounting folks as soon as I read it. That’ll get the great idea of the month award in our shop!

Thanks for sharing a gold nugget,