RHOL.COM
Rental Housing On Line
The Internet's comprehensive rental property location
 

Lesson 6

Miscellaneous
Keep track of your legal and collection expenses.

Recovering Your Costs
      In most states you have a certain amount of time in which you can recover your legal and collection expenses after they are incurred.  This period is usually two years.  You must file a memorandum of costs.  This is also done to collect your interest.  Filing periodically, say once every six months, is the best way to handle it.  That way you stay current in covering your costs.  See the Calculating Judgment Interest example.     

      Use a "memorandum of costs" or "declaration of costs" order to ask for the amount of the judgment to be raised for expenses and interest and to record any money the debtor has paid you.  Don't forget to figure in the additional accrued interest to date.  Keep all bills and receipts in case the debtor contests the charges.  This includes attorney fees, process server fees, filing fees, etc.   Just about every cost related to your judgment should be documented and can be recovered.  See the Memorandum of Costs example.
      If you file a "memorandum of costs" you must serve the debtors with a copy personally or by mail.  They usually have ten days to contest it with appropriate forms, but they usually don't. Even if they do contest the costs, the court will usually give you what you asked, assuming that the expenses are reasonable.
      Its a good idea to file a "memorandum of costs" when you file your "writs of execution" since you will already be at the courthouse.  Make sure that you recover your costs before the judgment is satisfied or you can't recover them.

Creativity, Compromise & Settlement
       If you chose to contact your debtor or they contact you, you can suggest some ways to pay the money like borrowing it or getting a cash advance on a credit card.  Be creative.  For example, if they own a store or service business you might be able to barter with them for goods or services.
     Sometimes you must remember that half a loaf is better than none, compromise, and make a settlement.

Closing The Books
      After you've collected all your money, don't forget to file a "satisfaction of judgment" with the court and have the debtor served with one to, usually by mail.  Also, make sure that you release all liens and garnishments or property that belongs to the debtors.  Failure to do these things could actually subject you to a lawsuit for damages.

Collections Costs Memo. Click for detailed example.

 

 

Back        

 

Contents
Pre-course Quiz
Prevent Collections
Background
Lesson 1
Lesson 2
Lesson 3
Lesson 4
Lesson 5
Lesson 6

Conclusion
Final Quiz

 

Collection
e-course
resources

Calculating Judgments
Fair Debt Collection Act
Law Sources
Memorandum of Costs
Motor Vehicle Records
State Web Sites
Tracing & Tracking