Topic: BAD DEBT COLLECTIONS--HOW ARE WE DOING?

I contacted our collection service yesterday, following up to see if our former manager was current on sending in bad debt files. They sent me a report of all files that have been sent in since November, 2013.

What I found really shocked me. We use a well-known national company for debt collection and out of 25 accounts sent in since November, 2013, with a total bad debt of $73,155.86, only $1407.32 has been collected. Those collections were in December 2013!!

WHAT!!????!!!

Is this typical throughout the country? Do we need to consider changing collection companies? This is a lower-income property, where most of the tenants barely qualify. We are also in a wage-garnishment state, however I don't think we can garnish for housing debt.

How are your bad debt collections adding up? I hope better than ours!

I agree with Sandy. I've worked with a couple of different companies that are well known; however, I found them to not work very hard, especially if someone owes less than a $1000.00. What I have had success with is using a local law firm. They don't mess around and I am absolutely for taking the past resident to court to get a judgement, even if we do not pursue garnishment. If the person wants to rent again or buy a house some time in the future, that judgment will affect them. Often that is when they come back to us and pay or set up a real payment plan they stick to.

So, the cost for the attorney to place a judgement on them would be less than the percentage the collection company gets. I've always felt the bad debt that is placed on their credit report was the #1 reason we collect, anyway.

Hmmm? Sounds pretty good to me.

I followed up with some of mine last week as well. I had 3 cases that had absolutely no movement. Their response was very similar for all 3 (bad phone number, we leave messages, etc.) I took it upon myself to search for these 3 folks online and was able to provide them 2 new jobs, numbers, and addresses. It just took a little sleuthing and a little Facebooking (which they can't use.) I provided the company with all this info; so hopefully they will get some results now. I think it's lame that I'm having to do their work for them, but if it gets some of these cases closed; I certainly will.

Getting a judgement is no guarantee tenant will pay... my judgement motivated the tenant to file for bankruptcy protection.... now what do I do??? I suggest you immediately hire a top gun to collect orelse live with non payments since there credit is already damaged... what's a judgement added to a bankruptcy... nothing!
A frustrated affordable housing provider to low income tenants!