Turning former tenant over to collections

After completing the eviction process, many landlords simply turn their former tenant in to a collection company in an attempt to collect on damages owed. In doing so, most landlords contemplate that it is unlikely that they will see any of the money owed so why not let a collection company waste their time on the matter. These same landlords do not see the benefit in proceeding with obtaining a judgement against their former tenant.

Collection opportunities actually increase once you have obtained a judgement against a tenant for money damages. With a judgement for damages, a landlord can garnish the tenant’s wages; garnish the tenant’s bank account; place a lien on the tenant’s home (in the event, that the tenant has purchased a home); or even execute upon the tenant’s vehicle. I have even seen creditors attempt to execute upon a debtor’s personal possessions when they were unable to place a lien on the home.

Most of these means of collecting are self-explanatory but I will explain them beginning with execution upon a vehicle. A creditor with a damages judgement can have the bailiff take into possession the tenant’s vehicle and hold it until the tenant pays the judgement owed the creditor. If the tenant fails to do so within a certain amount of time, the bailiff will place the vehicle up for auction. Any amount obtained in the auction for the vehicle will go towards paying the bailiff’s towing and storage fees as well as the landlord’s judgement against the tenant. Most tenants do not own more than one vehicle and generally have strong motivation to prevent its loss at auction.

Once you obtain a damages judgement against a tenant, it is relatively simple to place a lien on their home if they now own one. A lien prevents the tenant from refinancing or selling that home until they pay you for the judgement. Even if they do not own a home, if they attempt to get a loan for a home or for another major purchase such as a car, they will likely be denied the ability to do so unless they pay you.

If a tenant ever paid rent with a check and a copy was obtained, a landlord can attempt to garnish a tenant’s bank account after obtaining a damages judgement. A garnishment of a bank account is simply a court order to the bank to hand over any funds up to the amount of the judgement that may be found in the tenant’s bank account at the time of the garnishment. Generally, the landlord will not know how much money is in the account but any money in the account would have to be used to satisfy the judgement.

Garnishing wages is similar to garnishing a bank account except the court is now ordering the employer to deposit with the court a percentage of the tenant’s wages on every pay day until the judgement is satisfied.

Credit reporting companies generally pick up judgements against tenants and automatically place them on their credit reports. Unpaid debts may or may not end up on a tenant’s credit report.

A collection company has none of these options at its disposal if a damages judgement has not been obtained. A collection company must mainly rely upon telephone calls on a consistent basis to the tenant.

If a landlord possesses information about the tenants such as where they work; their bank account numbers from cancelled checks; information concerning the vehicles they own; or similar information, proceeding through with a damages judgement against the tenants may provide a more realistic way of collecting some of what is owed to you.

Landlord’s guide to collecting on judgments in Ohio