Do you offer skip tracing? How can I track down and collect money owed from a previous tenant?
Over the last 20 years as an investigator, I have seen thousands of cases where a landlord, acting purely on principle, has lost a great deal of money chasing a tenant who recently skipped out on rent or was evicted. These landlords desperately come to our firm to see what step they need to take to get their money. Though every case is different, the majority of the time this process becomes a waiting game.
As a landlord you need to know that a person who just lost the roof over their head probably does not have a high paying job or big fat bank account. If they did, chances are you would have been paid. And the fast food job they are working can easily be replaced, so if you try and garnish Taco Bell, they can move to Jack-in-the-Box across the street.
The deeper question we need to ask is “Why did they not pay rent?” With the majority of the country having less than $500 in savings, one little bump in the road can put your tenant into a tail spin. I have seen evictions caused by divorce, a broken relationship, job loss, health concern, traffic accident, car repair, prior collection, tax levy, criminal behavior, addictions like gambling or drugs, and a plethora of other unplanned occurrences.
The good news is that many of these heartaches clear up over time. People get remarried, obtain better employment, inherit money or find themselves in a better situation years down the road. So, if you feel you cannot collect right away, you might want to sit on your judgement or claim for a couple years. Each state has a statute of limitations or a judgement expiration period so make sure you understand your local rules.
For those of you who have a few judgements in your recent history, here are some strategic points to consider when determining if now is the right time to collect. A couple of the most successful ways to receive your money is through an employment garnishment or a bank garnishment.
If I was going for an employment garnishment I would:
Find your former tenant. This might not be easy to do on your own. Our simple skip tracing tool can locate your individual’s most current address in seconds for $5.
Drive by their current home and see if there are any visible assets, like cars. These assets may be an indicator that they have recovered financially. Keep in mind they might be living at home with parents so this step is simply an information gathering piece.
Go to your county records and see who owns the home. If your applicant has rebounded and somehow owns the home, it’s time to collect.
Search Facebook, Linked In, or other online resources to see if they have employment.
Be an investigator. I personally would call any reference contacts on the original application and creatively ask where the defendant works. I would covertly follow them to their employment. I would ask kids out front where their parent works (kids rarely lie).
If a defendant is self-employed and unable to be garnished through their employer, you can look for a one time grab out of their bank account.
Now in the old days, Private Investigators like me had our sources at the big banks and this process was easier. In our current state where everyone is paranoid about their privacy, getting peoples private information is much harder and often illegal, but don’t lose hope. The key is getting the bank account number and then knowing when to hit the bank account.
If I was going for a bank garnishment I would:
Find the business that the defendant owns.
Buy something using a check. You might want a friend to help in this process. On the back of the returned check, you will see an endorsement of their bank.
Serve the garnishment to the bank on the 31st of the month since most people have rent money in their accounts on this date. Add a $25 search fee with the garnishment. This $25 search fee will allow the bank to search all accounts in your defendant’s name.
It is important to know if your judgement is under a personal name; you will be unable to garnish a business entity like an LLC, S Corp, or C corp. In these circumstances, you can file a wage or employment garnishment with the LLC, S Corp or C corp. Many states will allow you to obtain judgement against a company if they do not respond to a wage garnishment. This process is a little tricky so advice from a collection company or attorney in your state is advised.
Additionally, you may want to record your judgements with your County Recorder’s office. Most judgments do not hit the credit bureaus unless they are filed at the Recorders office. Many times people will have to clear up their judgements if they want to buy a house or rent again, so make sure it has every opportunity to hit their credit bureau. If you want to make this sting, this is the best way to deter these individuals from doing this to a future landlord.
You need to ask yourself, how far am I willing to go to get paid? Am I patient enough to wait a few years? Whatever your answer, it all starts with finding your old tenants. RentPerfect’s new skip tracing product is a great start to see how collectible your judgements are and are the first step toward winning the waiting game. Skip Tracing is available in your ISC online portal.
For more information about skip tracing or our complete line of services, call Heather at 877-922-2547 or Heather@RentPerfect.com.
RentPerfect is a Division of Investigative Screening Company, Inc. (ISC)