Evicting a tenant isn’t fun, but sometimes you have no choice. It’s not necessarily your fault, either. A tenant can seem like a good choice at first, but take a few months to show their true colors.
If you’ve successfully completed an eviction that awarded you a judgment for damages, you might be thinking the nightmare is over. However, collecting a judgment from a tenant can be just as challenging as getting an evicted tenant to move out. Sometimes it can be harder. At least with an eviction you can have the sheriff physically escort a tenant off your property.
Unfortunately, you can’t send a sheriff to their door to demand payment for your judgment. However, you do have several options if your former tenant won’t pay up.
1. Hire a collection agency
Hiring a collection agency is the easiest, most hands-off approach to collecting a judgment. You’ll pay a small fee, but you won’t have to deal with the stress of trying to collect a debt. Evicting a tenant is stressful enough. When you started renting out your property, you didn’t sign up to become a debt collector.
On the upside, if you contract with a property management company, they’ll handle the eviction process for you and might even know of a reputable collection agency and even a trusted SEO company you can use for your marketing strategies.
2. Pursue wage garnishment
Wage garnishment is an option in most states. Check your state’s wage garnishment laws to see if it’s allowed where you live. For instance, wage garnishment is prohibited in Texas for most debts, except for court-ordered child support and alimony.
Pursuing wage garnishment will allow you to take up to 25% of your debtor’s wages until the debt is paid in full. The only caveat is that you need to know where your debtor is employed.
If you don’t know where they work, you can request a debtor’s examination from the court, which will require your former tenant to provide the court with their current employer and bank account information for your use.
Once you know where your former tenant works, you can file a wage garnishment order from the court. The order will be given to their employer, who will then withhold a percentage of their paycheck for you until the judgment is paid in full.
3. Be direct and request payment
It never hurts to ask for the money you are owed. You might be surprised by your former tenant’s willingness to pay their debt to you.
It is possible they will ignore your request, especially if you sound demanding. Yes, they owe you money, but make sure to ask for it in a polite manner. Let them know the exact amount of money they owe you with a due date. Inform them in a non-threatening way that if you don’t receive payment in full by the due date, their debt will go into collections.
Let them know their credit will be negatively impacted if they allow their debt to go to collections. They might need to repair their credit before they can rent again or get a mortgage.
4. Offer a payment arrangement
Your former tenant might not be willing to pay their debt because they either can’t pay it in full or they can’t make large enough payments to make a dent quickly. They might believe you wouldn’t accept lower payments, so instead of talking to you, they avoid you.
Offer to work out a payment arrangement that works for you and your former tenant. If their debt is $3,000 and they can only pay $100 per month, start with that and in your agreement, leave room to reassess the situation every three months.
5. Get a lien on your former tenant’s bank account
This is a last-resort solution similar to wage garnishment and is a good option if you can’t garnish your former tenant’s wages.
Just like wage garnishment, you’ll need to file an order with the court that includes their bank account information. Hopefully, you’ll have a canceled check you can use to get their routing number and account number. Otherwise, you will need to request their bank information from the court first.
Don’t wait too long to pursue a judgment
As time goes by, it will become harder to collect on your judgment. Don’t let too much time lapse. Stay on top of your collection efforts. If one method doesn’t work, swiftly move to the next and don’t give up until you get your money.