Collecting from a person with assets

“How come someone who owes money can still have a new car, nice clothes, and nice house, but not make their payments to our company?”

As you can imagine, we get this question a lot!  There may be a number of issues preventing us from collecting a bill owed by someone who appears to have a number of assets, some quite nice!  Some of the most frequently encountered obstacles are; wage competition from child support; divorces leaving your debtor with no attachable income; assets have no equity.  Lets look at each one of these individually:

  1. Child Support Attachment – this means the wage-earner has a child support order against their wages taking 25% or more of their gross wage.  We can only garnish up to 25%, so a person in this situation, no matter how much they take home, cannot have another wage garnishment.
  2. Divorces – your debtor may be remarried to a person with good credit and good income, but is not responsible for your account.  A new spouse will not be held responsible for prior debts.  So if the new spouse doesn’t want to pay, and the debtor has no attachable income, they can have all the nice things in the world and we cannot force payment.
  3. No equity – many people have nice cars or homes, but they may owe as much or more than they are worth.  I don’t know how some people are able to get loans and buy certain items, but it happens with some frequency.  You would have to submit a question to “Ask the Lender” for that answer.  But for us, there is almost never a situation where there is enough equity to cover the cost of doing a foreclosure on a home or vehicle, cover the exemption, and pay off all the creditors in front of our judgment to justify the process.  We often look at these assets, but rarely find the opportunity to pay a person’s debts by foreclosing and selling their stuff.


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