I have obtained a judgment, now how do I collect?

Once a judgment has been obtained and you are ready to collect, the following options are available to you. This information is generic, as each state has its own court and collection procedures, which vary by jurisdiction. It is advised that you take the time to research the process for your specific state and contact a licensed attorney for legal advice.

GARNISHMENT
If you have obtained a judgment and the former tenant does not pay the judgment amount upon issuance, the best way to collect the money owed is to file a Writ of Garnishment. There are three types of garnishment: periodic, non-periodic, and income tax intercept.

A periodic writ of garnishment is used to garnish wages or other income paid to the former tenant on a regular basis or via installment payments (other income includes but is not limited to self employment income, commissions, rent payments, and land contract payments). It is valid for a given number of days depending on the state (e.g. 90 or 120 days) or until the judgment is paid off, whichever comes first.

A non-periodic writ of garnishment is used to garnish accounts from banks or financial institutions (i.e. checking, savings, money market accounts, etc.) or other property. The writ is used one time. Once money has been garnished under the non-periodic writ, the writ is no longer valid. If there is a remaining balance on the judgment, you must obtain another writ. Each state has a list of funds that are exempt from garnishment. A few examples include social security benefits, veteran’s benefits, unemployment compensation, public assistance payments, and certain retirement benefits. Contact the county clerk for a complete list of exemptions.

An income tax intercept writ of garnishment is used to garnish a state income tax refund payable to the former tenant. The writ is used one time. Once the income tax refund has been intercepted by the Department of Treasury, the writ is no longer valid. Seven states do not impose a state income tax and two additional states limit income tax to dividends and interest income only. Other states do not support the garnishment of state income tax refunds at all. You may need to do a little research to determine if this option is available in your state. If it is, it is an easy process to garnish the refund but the amount garnished is usually a small amount. NOTE: this applies only to state income tax refunds. You are unable to garnish a federal income tax refund or local income tax refund.

If you know the name and address of the former tenant’s employer, begin by garnishing wages. Provided the former tenant remains employed, the debt will be satisfied over time. Federal statutes limit the percentage of wages that can be garnished each pay period to 25% of disposable earnings (i.e. gross pay minus taxes, Social Security, and other mandatory deductions). Employees may also claim hardship thereby reducing the percentage garnished even further. Depending on the amount of the judgment, it may take a while to satisfy the judgment and you may need to file another writ of garnishment if it expires before the debt is paid in full. If the former tenant’s employer already has orders of garnishment that are in effect, you will have to wait until that judgment has been satisfied to have your garnishment processed. Garnishment orders are paid in the order that they are received by the employer, with one exception, if the employer receives garnishment orders with a higher priority than yours (i.e. orders for support or taxes) then the garnishment order from you will be set aside until the garnishment with a higher priority has been satisfied.

A bank account or financial institution garnishment is very similar in process to a wage garnishment; however, instead of sending a writ of garnishment to the employer, it is sent to the bank or financial institution. The debtor is not entitled to prior notice of a bank garnishment and will be notified after the account has been frozen. You must know the name of the bank, the branch address, and the account number(s).

If the former tenant is self-employed, you must know the name and address of the business and the execution must specify that money from a “cash box” or “cash drawer” is being garnished.

LIENS
In some states, you may file executions upon automobiles, homes, land, or other property owned by the former tenant.

You may not need to do anything to record a lien on real property. In some states, a court judgment automatically creates a lien on any real property in that county. Contact the court clerk to determine if you need to take additional steps to record a lien on real property. If you do, the court clerk will issue an Abstract of Judgment-Civil for a nominal fee (approximately $15). You must be able to provide the legal property description, which is available from the County Assessor's Office. Once the Abstract is filed with the court clerk and returned to you, it must then be delivered to the County Recorders Office to be recorded (approximately $20). Once recorded, if the property is refinanced or sold, you will get paid the judgment amount plus interest.

You will need to contact the court clerk to determine if a lien may be placed on an automobile. Most states will not lien a vehicle for a small claims judgment unless the debtor voluntarily grants one to you. If granted, you will need a description of the automobile and location, the Vehicle Identification Number (VIN) (depending on the state), the name(s) of the legal owner(s), and any outstanding liens on the vehicle in order to lien the vehicle. This information is available from the state’s central Department of Motor Vehicles (DMV) office; local DMV offices cannot provide this type of information. There is a fee to obtain this information.

Liens need to be re-filed if the former tenant moves (without selling the property) or the judgment is renewed. Liens need to be removed once the judgment is satisfied.

ATTACH PERSONAL PROPERTY
A Writ of Execution must be filed with the court clerk (for a nominal fee). The Writ is then delivered to the Sheriff or Marshal with written instructions indicating what property to seize and where the property is located (fees vary). The Sheriff seizes the property and the property is sold at auction. Property may include major household appliances, tools, equipment, vehicles, etc. There are fees to store the property after it has been seized.

A NOTE ABOUT SEIZING VEHICLES: If a vehicle is to be seized you must include the name and address of any person or company that has an interest in the vehicle (i.e. include the lender’s information if the vehicle is not paid in full or if there is another person that has filed a lien, that information needs to be included). It is a requirement that you make reasonable efforts to find out if anyone else has an interest in the property (i.e. check with the DMV to find out who is registered and the Secretary of State’s Office/County Recorder to see if anyone has filed a lien). This can be a complicated process and become very expensive (i.e. fees to tow, impound, and store the vehicle, and if not claimed, fees to advertise and sell the vehicle).

Each state also has a list of personal property that is exempt from seizure. Please check with the court clerk to obtain a list of exempt personal property.

DEBTOR EXAMINATION
If you know the former tenant has assets, it may be worth your time to file a motion that forces the debtor to come into court and answer questions about assets, debts, and earnings. It may be called a "supplemental examination," "debtor examination," or "disclosure hearing", depending on your state. This procedure allows you to obtain asset information from the former tenant (e.g. account numbers for bank and non-retirement investment accounts, information about property or land owned, owned interest in a business, type and location of vehicles owned, etc. If the former tenant does not show up for the examination hearing, the court can issue an arrest warrant. You may want to consult an attorney to discuss this option and the fee.

If you are unable to satisfy the judgment using any of the methods above, at a minimum, judgments are recorded by credit reporting agencies and the former tenant’s credit may be adversely affect by the judgment and their ability to rent a home will be greatly diminished.

If the judgment is not satisfied, then it must be renewed after a ten-year period, for one more ten year period, by completing the required forms and submitting them to the court clerk.


BEST PRACTICE NOTE: Always make sure to obtain adequate information about the tenant’s assets on the “Application To Rent” and keep pertinent tenant information current by having the tenant update the information annually. This will make the task of obtaining and satisfying a judgment easier should the tenant leave an outstanding balance.

An Application To Rent and the Annual Update of Pertinent Tenant Information is available to registered users at http://www.AboutTenants.com.

How To Locate A Former Tenant

In today’s economic climate, the chance of having a tenant move out and leave behind an outstanding balance is on the rise. Landlords must rely on tenants to provide a forwarding address upon move-out and if the tenant does not provide a forwarding address, once the tenant moves out it can be difficult to locate him/her.

Begin the process of locating a prior tenant by using the information provided in the application to rent.

1) Contact the employer listed to determine if the person is still employed by the company. If the person is no longer an employee, ask the supervisor for the address they have on file. If the person parted from the company during the current year, the employer will be required to send a W-2 by mail and would therefore have a current address on file. If the employer is not able to release the address on file, ask if they would release the information if you certify that it is to serve process.

2) Pull a credit report using the social security number provided. This is not a free service but the credit report will show the former tenant’s current address (provided enough time has lapsed) and/or current employer. If just one of the addresses provided in the credit report is correct, the landlord is able to serve process. This is the quickest and least expensive way to locate a former tenant. The cost to run a credit report online is approximately $10-$15 and the results are instantaneous.

Additional ways to locate a former tenant:

1) If you know the former tenant’s telephone number (landline only), use the Google Phone Book querying function to search the number. Go to www.google.com and in the search box type in "phonebook: XXX-XXX-XXXX" (where xxx-xxx-xxxx is the telephone number) then select “google search”. If found, the name and address will be displayed. If the reverse search yields no result, it means the number is either a cell phone or an unlisted telephone number.

2) Call directory assistance. If you know the area that the tenant is likely residing in, call directory assistance for that area. Often people will have an unlisted telephone number (i.e. not in the phonebook) but the person is included in directory assistance.

3) Address a letter to the prior tenant’s last known address and below the return address write: “Address Correction Requested. Do Not Forward”. The letter will be returned with the new address, if one is on file.

4) Use the various online people finder sites such as 411.com, addresses.com, anywho.com, directory-assistance.net, iaf.com, infospace.com, public-records-now.com, switchboard.com, theultimates.com, ussearch.com, whitepages.com, and zabasearch.com. These sites may be helpful in finding a current address, telephone number, or relative.

5) Search for the former tenant at www.abouttenants.com. A prior or current landlord may have entered the person into the databank of tenants. If not, enter the tenant's information, including the outstanding balance and request to be contacted should they apply for housing with another landlord.

6) If the former tenant purchased a house upon move-out, contact the County Assessor or County Recorder’s office to find out how to search the tax rolls. Tax rolls list the names of the property owners and the address of the property.

7) Contact the prior landlord that was listed in the application to rent. It is a long shot, but worth the few minutes it would take.

8) Calling the personal references and emergency contact provided in the application to rent will probably not be beneficial, but if you have exhausted all other possibilities, it may be worth the time.