Collections after eviction

[Clever Username]

I've got a friend who rented out their old home when they bought a new one.

Well... after tennant hemming and hawing for month after month (they left it waaay too long imho), enough is enough, they've got a court hearing for eviction and back rent coming up early next month.

They'll just be glad to have them out.
But they stand to have a $15,000 judgment entered in the case as well.

Anyone know about collections following eviction?
Just hire a lawyer to serve the employer with a citation to discover assets / garnish wages?
Could it really be that easy?

I don't have the dates on hand, but the tennants filed BK at some point so likely can't file ch7 immediately.

Thanks.

[Savoir Faire-Demogague in NJ]

Generally speaking, a landlord is SOOL for back rent following an eviction.
I defer to the forum landlords.

[michelyn8]

If the court grants your friend a judgment for the past due rent, he can follow all the normal collection procedures. That means collection of the debt as your state laws allow.

[Savoir Faire-Demogague in NJ]

If the court grants your friend a judgment for the past due rent, he can follow all the normal collection procedures. That means collection of the debt as your state laws allow.

In other words, it is uncollectible.

[zibazinski]

If they have jobs, it is not uncollectable but the law makes it real hard for you to do so.

[Savoir Faire-Demogague in NJ]

Yeah, God forbid someone be forced to pay their rent.

[zibazinski]

I'm just saying. My mom decided to finally not let it go and went to collection process. Had to get a lawyer so that expense, has to continually re-file for collection which means court and all. But she was determined and she will collect it all which amounted to a few grand.

[mithrin]

You should see if you can find a discussion board about collections that is specific to your state to find out what is/isn't legal to do.

For 15K, it's probably worth investing some sweat equity to at least try to get something back. If the easier methods don't work (demand letters, wage garnishment, seize bank account balances) you can decide if it's worth paying a professional to try pursuing it, knowing that you might be out fees without seeing any money recovered. If the renters are professional deadbeats--jobs under the table, no bank accounts, no seizable assets, then they may be uncollectable.

If all else fails, write off the debt as a loss (possible tax break?)--and if so, be sure they send the deadbeats a 1099-C, so they can be taxed on the forgiven debt. The IRS is usually pretty good at collecting. If your dealing with professional deadbeats, they are probably gaming their reported income to qualify for EITC. An unexpected 15K extra income could easily knock them out of EITC territory on top of adding to their tax bill (send the 1099-C as late as you're allowed, if the deadbeats have already filed before they get it, and EITC abusers generally file early for the refund, they'll have a hard time changing their other income numbers after the fact).

[TheOtherMe]

My sister and BIL got an eviction order and order for back rent years ago. People were good tenants except that they didn't pay their rent. Paid the rent the next day and tenants were told all future rent has to be paid by cash. They have never been late again.

Some people DO learn the hard way.

[cronewitch]

I got a judgment and garnished an ex tenant but she had other judgments and garnishments. Not only was she not good at paying rent but would you believe she was behind on student loans and daycare bills. Our state allows 60 days garnishment so you need to keep garnishing then if they are already being garnished yours is in line so you might get 60 days out of 6-8 months. During your 60 days they are garnished a percentage of income. If they quit jobs you might not be able to keep finding them.

I did my entire eviction and garnishment without a lawyer it was kinda fun garnishing her pay.

[Deleted]

Agree with the others, your friend needs to research state law to see what s/he is allowed to to do. Your friend should probably consult with his/her attorney. I also find that Nolo Press has some good information on different legal subjects.

If the tenants file for BK after the judgment your friend is out of luck. Not sure if you could still file a 1099c at that point.

But if they don't file for BK, typically those judgments will stay on their credit report for 10 years. I've seen smaller amounts paid off years later when someone wants to buy a house (escrow won't close because the old debt can attach the property senior to the mortgage).

15k is a lot of back rent. How far behind were they?

Good story Crone. I don't think I would have been so proactive but it probably depends on the situation. I know if the tenant trashed my property I would definitely take it personally!

[Mardi Gras Audrey]

Feb 22, 2011 17:38:26 GMT -5 mithrin said:

If all else fails, write off the debt as a loss (possible tax break?)--and if so, be sure they send the deadbeats a 1099-C, so they can be taxed on the forgiven debt. The IRS is usually pretty good at collecting. If your dealing with professional deadbeats, they are probably gaming their reported income to qualify for EITC. An unexpected 15K extra income could easily knock them out of EITC territory on top of adding to their tax bill (send the 1099-C as late as you're allowed, if the deadbeats have already filed before they get it, and EITC abusers generally file early for the refund, they'll have a hard time changing their other income numbers after the fact).

Hee-hee... send the IRS after them.... I like that. The man doesn't like it when u mess with him...

[Clever Username]

Yeah, $15k is a lot of rent.
Amateur landlords.

The tennants are serious flakes, they never quite linked the rent payment to being allowed to stay in the house.

They might have straitened up and started paying if they got eviction papers at 60 days.
At this point they are irretrievably far behind.
I think they're smart to get the judgment entered even if it's just to earmark this as possible future collections.

In my friend's defense, they really do have bigger fish to fry than this. He's fighting to keep a family biz afloat and she spent her effort on beating breast cancer during the start of their rental days.

In IL we can garnish 15% of wages, I just don't know too much about the steps between judgment and citation.

I know they filed a ch13 bk to stop foreclosure on their last home, converted that to 7 when they let go and moved on to this rental.
But the timing is critical. 8 years after the ch13 filing date, they qualify to file another 7. 4 years after the filing date, they qualify for a % based ch13.

He had me vet that paperwork for him.
I still stand by my original assessment.

"They'll be better off without the foreclosure and their unsecured debts, but notice at one point they felt comfortable not making their home payment. "
History does repeat itself.

[comom1]

We simply turn it over to a collection agency. We've always gotten paid in the end. I'd rather have 60% of what's owed and not have the hassles of trying to attach wages or keep renewing a judgement.