Pursuing a Money Judgement Against An Ex-Tenant . . . Should You Even Bother?

Once you have evicted a tenant and have your property returned to you, you are confronted with the decision of whether to invest the time and money to pursue the ex-tenant for money damages or not.

Some of my landlord clients always pursue the ex-tenant for money judgments. Of that segment of landlords, some will obtain their judgment, docket the judgment, and then sit on it hoping that the tenant will eventually pay it off (plus 12% interest) when they need to obtain a loan to purchase a home. Other landlords that I work with will not only obtain the judgment against the tenant but they will also proactively attempt to collect on that judgment via garnishment actions.

On the opposite end of the spectrum, are landlords that never seek a money judgment against a tenant as they consider it to be a waste of time and would merely result in "throwing good money after bad" because the tenant is not collectible. Still other landlords opt to try and collect from past tenants via alternative means such as using the service of Rent Recovery Services --- which allows you to report the ex-tenant's debt to the 3 credit bureaus without the need to obtain a judgment.

There are many options for a landlord to choose from when it comes to collecting against an ex-tenant. There is not one correct option for all situations and for all landlords. The correct option depends on many factors. I will sift through all of the information (or the lack thereof) that my client has about the tenant that could assist in the collection process. Sometimes a discussion regarding the client's financial situation is needed. Determining my client's ultimate goal is a must.

It is my personal opinion that time should be taken up front to discuss these matters with a client so that there are no false illusions going forward. Many landlords are astonished to learn that once they obtain a judgment that they must spend more time and money to collect on that judgment. It is important to remember that a judgment is merely a piece of paper saying that your ex-tenant owes you money, it does not mean that you will get paid. Collecting on a judgment is a whole different ballgame . . . . and a different blog post.