In years past, a person who failed to pay their debts was locked in chains and committed into the custody of a debtors’ prison to serve their sentence until their debt was repaid. During this period, the collection of judgments and other debts was a simple matter of making a demand and sending in the jailer. Believe me, these prisons were not someplace a person wanted to end up. Today, since we have no debtors’ prison, compelling a person to pay their debts can be a much more difficult endeavor. Landlords and other creditors must often balance their desire to recover funds which are rightfully owed to them with the time and costs which may be expended without any likely recovery. While the collection of judgments is often difficult, there are several very effective means by which a creditor can recover the amounts owed to them while balancing the proverbial concern of throwing good money after bad.

Clearly, the issue in most of these cases is collectability, rather than liability. In other words, in the vast majority of cases, the Tenant or other party clearly owes the money. Either they breached their lease, didn’t pay on their contract, or otherwise owe the money. The real issue is how we get it from them. Of course, the first step in the process is finding the person. Any collection efforts require you to be able to properly serve the person with a complaint. If we can’t find them, we can’t sue them. Finding the person may be as simple as searching the internet or having your attorney make a request to the post office for a forwarding address (which for some reason only an attorney can do). Sometimes it can be as simple as asking the moving company, neighbor, or the postal carrier. Sometimes, you can simply ask the person where they are moving to!

Once you find the person, the next step is to decide whether there is any reasonable likelihood of collecting from this person. Some of the factors to consider are whether the person is working, whether they own any real estate, and whether they have an open bank account. A great source of this information will be the rental application the person completed before moving in. Does the application show where they work or where they bank? If so, consider calling these sources to see if information is still up to date. If the person paid you with a check, call that bank to see if the account is still open. Once you have the information, you need to perform a cost-benefit analysis on proceeding. If the person has no job, no bank account, and was evicted because they could not pay you, or if you cannot find them, it likely does not make economic sense to proceed (but read on for some ideas). If the person is potentially collectable, there are several potential means of collection.

For the “uncollectables” or “lost” debtors, there are a few inexpensive and easy options available. The most fundamental is to report the debt to the credit agencies. If you are pulling credit reports for applicants, you should be able to use the same service to report the debt. While many of these people may not be seeking credit now, there are many times a person will call years later because they need to fix their credit in order to lease a car, buy a house, etc. Likewise, you may consider hiring a collection agency to attempt to collect the debt. While these companies often take a percentage of what they collect, they do all the leg work any money you get is like found money. Losing 40% of a debt may be wonderful if you thought you had 0% chance of collecting!

Turning to the “collectible” deadbeats, here are some helpful options to consider:


  • Bank Account Attachment: If you know the person has an active bank account, consider seeking an attachment of this account. Some banks will still allow you to verify that the account is open and whether the amount you are owed is in the account. You can then file a civil action in court and obtain an attachment of their account, called a Trustee Process attachment. As you can imagine, once their account is frozen, the case will often quickly resolve with a payment of the amount due to you. Since the attachment of the account occurs at the commencement of the case, you can usually have your attorney handle such an action in a quick and cost effective manner. Even in cases where you cannot verify the amount in the account, it may be cost effective to seek such an attachment if the amount at issue is enough.


  • Real Estate Attachment: It is very easy to find out if someone owns real estate, especially if you know where they live. A quick internet search of the county registry of deeds will inform you of the real estate the persons own and any mortgages or other liens. If you locate real estate, you can file a civil action and ask the judge to put a lien on their property to secure any judgment you obtain. Again, the mere attachment of the real estate will often result in the debtor agreeing to resolve the case or at least insuring you that you have some basis to collect. Since it will also prevent the person from selling or refinancing, the attachment may have an significant advantage in collecting the amounts due.


  • Wage Attachment: If you are lucky enough to be owed money by someone that works, you can seek a court order requiring the employer to withhold part of the person’s paycheck to pay you. Unfortunately, there are many restrictions on this remedy, including the fact that you already need to have a judgment against them and there are amounts which are exempt from attachment. However, if the person is employed, this may be a very effective means of collection.


  • Supplementary Process Action: In many cases, you may already have a judgment against the person, either as a result of a summary process (eviction) action or a small claims case. In these instances, you can employ a process known as “Supplementary Process”. In these cases, the debtor is summoned to court to explain why they have not paid. If they do not appear, the court can issue an arrest warrant to have them brought to court. If they do appear, they will have to explain to the judge why they have not paid. If the judge finds that they have the ability to make payments, s/he will order these payments and the person can be held in contempt of court if they are missed. Unfortunately, if the judge finds that the person lacks the ability to pay, there is nothing you can do (other than try again in a few months). However, you will be able to force this person to disclose all of their assets and liabilities, which may have the added benefit of causing this person some potential embarrassment, etc. Since these cases are very inexpensive to file, and since you can often do them without an attorney, you may want to consider the use of this process to try to collect these debts.


  • Small Claims: Small claims is an informal and inexpensive means by which you can attempt to collect your debts. Recently, the limit for small claims actions was raised to $7,000.00 and the filing fees are very inexpensive. You can also handle these matters without the assistance of an attorney. While you will need to spend some time sitting in court (sometimes a few hours in certain courts), this system is intended for collection of these smaller debts. Likewise, you may want to consider bringing a number of your debtors to court on the same day as there is clearly an economy of scale. Some of our clients have found that filing ten (10) cases against their “A” list of debtors results in a reasonable percentage of collections at a reasonable cost.


Hopefully, some of the options in this article may be helpful in exploring options to collect on your debts. While some of these accounts will clearly be written off to bad debt, some of these options provide managers and owners with simple and effective options to at least attempt to collect. Of course, you should consult with an attorney prior to initiating any collection activities as there are state and federal laws which may apply(including Fair Debt Collection Act). If you have any questions or would like to sign a petition to re-create the debtor prison system, feel free to contact our office.