Sometimes you just have to know when you are beat.
When it comes to collecting past due accounts, I am actually better than most and have a success rate around 65%. (Many landlords would be happy with a 25% collection rate.) However, one of my secrets is knowing when to pursue and when not to; knowing when it is worth making an effort to be a not-very-nice person, and when no effort in the world will help as there is just nothing to collect.
A few years ago I made a severe mistake in judgment. We had a lease with two individuals, and the parent of one of them was a co-signer. The whole reason we obtained a co-signer is because based on the applications, we can concerns about the long-term financial stability of the tenants. (So, if you are asked to co-sign, whether it be for an apartment lease or some type of loan, don’t be surprised if one day you get a call saying you owe the money because the other party defaulted – the whole reason they wanted the co-signer was because of a reasonably high probability of default.)
Well, as things would have it, one of the parties (the one who provided the co-signer) had to vacate before lease end. By the end of the lease term, the remaining tenant had managed to owe a couple of thousand dollars in damages. That tenant was completely uncollectible so I went after the other tenant and their co-signer and got my money. So, where was this error in judgment I mentioned? Well… when getting payment from the co-signer, I did mention to them that I would be willing to help them through the legal process if they wanted to pursue a collection action against the person who actually caused the damage.
That was nearly three years ago and the saga continues. The person who ended up paying off the account now lives out of state, and the person who did the damage is in state, but hours away from the Wausau area. The person who ended up paying off the account has an “abrasive” personality to put it mildly. So, in helping them obtain a court judgment, I made every effort to tell them how the process worked. He wanted the judge (or in this case the court commissioner) to do certain things. I tried to tell him that is way outside of what they do. He wanted to ask, I advised him not to… stay on the court’s good side. Well.. that didn’t happen. To this day when I go to the small claims window and if I have time for small talk with the person who you do the small claims filing with, if I mention his name, she rolls her eyes at me and I feel that thick glass there might be for my protection.
Nearly three years have gone by. The person who the judgment is against has finally obtained a low-paying job, but also has a child support garnishment coming out of his wage. With a civil judgment you can only garnish up to 25% of take home pay, the garnishment levels for child support go well beyond that, and (rightfully) take priority to civil judgments.
If this were my case, this is when I would admit defeat. That child support will be there for a long time and will always take priority. The most that I could hope for is that during the 20 year life of the judgment, is that this person buys a house, and this person sells that house. A docketed judgment is a lien on real estate in the county it is docketed. That lien would need to be paid to get clear title. Other than that… this would be a lost cause. (Of course, this being a lost cause doesn’t surprise me, that’s why I got the co-signer in the first place.) In the mean time, the person with the judgment feels that piece of paper from the court should be as good as a command from god and doesn’t understand why he just isn’t getting satisfaction… so the daily (and sometime hourly) calls continue to come in…. asking of me what more he can do.
This makes a good topic for the Dr Rent show tonight (5-6 PM on WNRB-LP, 93.3 FM – Wausau). We will discuss what happens after you get the judgment. What is the financial disclosure form and is it important to get one right away. How do you garnish wages? What other rights of collection do you have (and what rights DON’T you have)? What does it mean to docket the judgment and what does that accomplish. I have had discussions on how to obtain the judgment on other shows, but we really haven’t talked much about what do once you have it.
Also, a couple of questions have come up which we will discuss before we get to our topic of the week. One question has to do with subletting and how it works. It is a follow up from last week’s question on the landlord’s duty to mitigate (re-rent) when a tenant vacates before the end of the lease. Also, I had a question that dealt with marital property. The husband signs the lease and does the damage… is the wife also on the hook?
After the show, I am off to the Sky Club in Stevens Point. It is the monthly meeting of the Central Wisconsin Apartment Association and Attorney Andrew Schmidt is tonight’s speaker. Until then… HAPPY RENTING!