I’ve got a money judgment against my former tenant. How do I get it collected?

The best way to get paid on your judgment is to have the tenant voluntarily pay the judgment and get it over with. That usually does not happen without some landlord encouragement.

The judgment gives you the legal right to collect the money owed to you. The court does not have a collection duty. It is your decision regarding how to collect the judgment and when to collect it.

All collection efforts must be legally compliant. Each state has its own system regarding the collection of judgments. It is your responsibility to research your state’s laws and your particular court’s procedures. Additionally you need to comply with applicable federal and state laws for credit, collection, and protection of consumer personal financial information.

You can collect the judgment yourself, hire an attorney to collect it, or turn the debt over to a collection agency. As a judgment creditor you have more rights and more ways to collect on a debt than does a collection agency. For instance, if your former tenant is employed, you could garnish his/her wages, file liens against the tenant’s property, and seize any tenant bank accounts.

Keep in mind that not all judgments are collectible right away. Your former tenant may find ways to delay or avoid collection. However, sometimes the debtor must pay the judgment, along with the accrued interest calculated at the state’s specified rate, when needing to obtain a loan some years after the judgment was obtained.

If your former tenant is uncooperative or difficult to locate it could take quite some time to collect the judgment. Placing the debt for collection with an outside agency or attorney for an extended time period may be costly particularly in light of the judgment amount and associated collection fees.

If you want to consider collecting the debt yourself, you should take into account the dollar amount of the judgment, the costs in pursuing collection, the value of your time and your willingness to put your energy into collection efforts for possibly a long time, with no certainty of success.

Regardless of whether you decide to collect the debt yourself, hire an attorney or use a collection agency, you should document the information you already know about the former tenant. Any information you can list about the debtor – e.g., a former or current residence, contact information, employment status, real estate property, personal property, vehicles, bank accounts, etc. – can help you or the collection agent take action to locate the debtor, the debtor’s assets, and collect the judgment.

You have the legal right to collect your full judgment, but you also have the right to propose a negotiated settlement for less than the full amount or to offer the debtor a scheduled payment plan. If you decide to offer a plan of any kind, make sure your plan is written in clear and understandable terms and conditions. You and the debtor will be bound to the new agreement by your signatures. You may need to file the signed stipulated agreement with the court.

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