Re: tenants left without paying - Posted by Frank Chin
Posted by Frank Chin on May 15, 2006 at 07:55:47:
I’m an active Landlord, but my first job out of college was consumer credit where as you might have guessed, many folks fall behind, and get sued. And judgments are just that, judgments. Most judgments remain “uncollected”.
Exceptions are if people work for major utilities, corporations, or the goverment, and plan to stay years and years. Even here, “deadbeats” had us beaten.
The major weapon is the “garnishee”, and unfortunately, the law only allows creditors to attach 10% of gross wages, and ONLY ONE can be in effect at a time, so creditors doing an “income execution” would wait in a que. Often, we find we may have to wait 10 to 20 years for our money.
Someone already having there wages attached, with a long line behind it is judgment proof. They also have the option of filing bankruptcy.
Consider yourself lucky that the tenant had left, even with a sorry mess as you described. At least you can “work fast” and have it re-rented.
Consider yourself “unlucky” if your tenant stayed “rent free”, fighting the eviction. Getting a judgment for 2 months unpaid rent is far better than getting one for 10 or 12 months, and unable to collect, and unable to pay your mortgage.
Hopefully, you collected a hefty deposit, and followed the procedures for keeping it, where in most jurisdictions, you write a certified letter, return receipt requested, explaining why you’re keeping it. Failing that, you’re not even entitled to keep it.
Having been in the consumer collection business, I had one tenant, started off good, who fell on bad times, and wound up owing me six monts rent at $1,200/month, totalling $7,200. And the time, he was behind with everyone else, sued left and right, finally filing bankruptcy.
And what would most creditors do?? Be nastier than the next creditor.
Being a little smarter, I told him that I don’t want to kick him while he’s down, and he can take care of me when “he’s got things straightened out”. And what’s the harm in doing this since I know I can’t get paid anyway??
Long story short, two years after he was evicted, he left an envelope with a $50.00 money order in the mailbox of the rental for me, with a note to my new tenant asking him to ask me to get in touch with him. He started paying me weekly, usually $50.00, sometimes more, till the balance was down to below $2,000, and then he paid me a lump sum to settle the rest.
At the time, I came by his place to pick up the final payment, and stayed around for the barbecue, and one or two beers.
And why did he do this?? He explained that everyone was yelling and screaming, calling for has scalp, and I stood aside and said "Dennie, take care of yourself first, get these people off your back, and get back to me when you got things straightened out.
Reverse pyschology works well when nothing else does.