worth trying to get money from bad tenant? - Posted by Jill Humbert


#1

Posted by George on January 28, 1999 at 23:29:36:

I think the point of the 1099 was to at least burden the deadbeat with the income tax on the amount and the possible burden of an IRS audit. You cannot claim the debt as a deduction, you obviously don’t claim it as income.


#2

worth trying to get money from bad tenant? - Posted by Jill Humbert

Posted by Jill Humbert on January 27, 1999 at 18:28:39:

Is it worth our time/headache/money to try and get money from tenant who owes us $650 and is moving out in a few days? (we hope) Her lease is up on Monday, she hasn’t paid at all this month because"she needs to save her money for anew place" Any suggestions?


#3

Re: worth trying to get money from bad tenant? - Posted by George

Posted by George on January 28, 1999 at 23:23:42:

Well, I would definitely keep her security deposit. Follow your state rules as far as notification to tenant. Unless you need to keep that for damages, that should limit your loss, if not eliminate it. You can file in small claims court and you’d probably win and get a judgement against her. Depending on your county, it’s not a big deal and if she ever applies for a mortgage, she may have to satisfy your judgement.


#4

Re: worth trying to get money from bad tenant? - Posted by John(NH)

Posted by John(NH) on January 28, 1999 at 10:05:03:

I have a similar situation. I bought a place with an existing tenant with no security deposit or information other than their name and SSN. Now she’s moved out and owes me about $700. I severely doubt she would be able or willing to pay. I plan on finding her in her new place, and if she does not pay, file a 1099 form with the IRS forgiving the debt (which is then taxed as income).
-John


#5

Just put them on the list - Posted by BankRobber

Posted by BankRobber on January 27, 1999 at 20:05:56:

It is probably not worth your effort unless they have some assets which you can attach (unlikely) and/or you have some free time to research the matter. I just put people like this on my list. The actual list is just in my head, but I keep supporting documentation (names, references, SS#'s, addresess, relative names) in my files. I don’t intentd to do anything with the list unless I get a terminal illness. At that point in time I will extract my revenge. If they are lucky I will stay healthy.


#6

Re: worth trying to get money from bad tenant? - Posted by Rob FL

Posted by Rob FL on January 27, 1999 at 20:03:40:

Once they are moved out. Deduct what they owe from the security deposit. Hopefully the deposit is close to the month’s rent. If you don’t have a deposit (which I can’t imagine that you don’t have anything), $650 is definitely worth pursuing unless these people are judgment proof. Take them to small claims court and get a judgment if you feel you have a good strong case against them. Then you can garnish their wages or even take their new security deposit that they put up with their new landlord.


#7

is it worth trying to beat a dead horse? - Posted by dave-cleveland

Posted by dave-cleveland on January 27, 1999 at 19:47:47:

jill, allow me to remind yu to look at the big picture, and your long term investment in property. if you rent, you will occasionally get bad tenants who won’t pay you. get rid of them as soon as possible…legally preferably…although i’ve been tempted, ahem. the best way to determine if someone will pay you is to screen them up front, credit report, previous landlords, employers, ask their cat if he’s fed on time…a good book is called “landlording” let it go, hope the property is still in good shape, somnetimes it surprizes them that your helpful at their move-out, and they may surprize you. good luck!


#8

Re: worth trying to get money from bad tenant? - Posted by Sean

Posted by Sean on January 27, 1999 at 18:59:24:

Regarding your problem tenant: How much is your security deposit from the tenant? Please tell me you DO have a security deposit, don’t you? Why is the tenant still in there after a month of not paying? Have you even started the eviction process?


#9

Re: worth trying to get money from bad tenant? - Posted by Jennifer(NH)

Posted by Jennifer(NH) on January 28, 1999 at 12:33:22:

Before you can file a 1099 form you have go secure a judgement against the deadbeat tenant. That requires locating where they live, spending an additional $25-35 to file for a court appearance and then waiting another 30 days to see if they respond. If they respond you go to court, if they don’t respond it may be a default judgement in your favor. If when the court sends a certified letter and the person ignores this I am not sure what happens there.

You maybe better off paying Landlord Connection $25. They pass the information along to Experien. Experien (sp?) sends out some threatening letters and if they don’t pay, Experion marks their credit report.

Also, I’m told that because you filed a 1099 this doesn’t necessarily mean that you can deduct the forgiven debt from your own taxes.

Good Luck, John. Hopefully you make out better than I have.

Jennifer


#10

Re: worth trying to get money from bad tenant? - Posted by AL Pine (CA)

Posted by AL Pine (CA) on January 28, 1999 at 11:02:46:

Hello!

You mention an item that sounds really interesting in regards to taking there security from new landlord.
First of course is to find out where they moved to and
when this is acomplished exactly how would one do this exactly? I have a judgment against my former tenant could I use this method in conjuction w/garnishment?

Thks Al


#11

Re: worth trying to get money from bad tenant? - Posted by Eric (NH)

Posted by Eric (NH) on January 28, 1999 at 22:36:00:

With respect to a 1099, according to the Ernst & Young Tax Guide, a bad debt can only be deducted if you use either the accrual or hybrid (cash accrual) method. For the average landlord who is on the cash method, bad debts are not deductable. Sorry.

Eric (NH)


#12

Re: worth trying to get money from bad tenant? - Posted by Rob FL

Posted by Rob FL on January 28, 1999 at 11:32:43:

State laws differ. Do what you can to track them down. Phone book, public records, internet, the references that put on their rental application with them. A few people on abandonned properties that I had to track down, I would find someone with a similar last name or a neighbor and tell them I am an old classmate of the missing person and I wondered if they knew how I could get in touch with them (I hate to lie but sometimes it works).

As for take the security deposit, you would probably need to garnish it just like a bank account or wages.