Collecting from people in a difficult economy

“What are you doing to try and collect from people in this difficult economy?”

We have had to become more “creative” in our efforts to collect outstanding debts as the economy continues to suffer with high unemployment and depressed real estate markets.  Our standard mode of operation is to try to make payment arrangements, and failing to come to agreement, file a lawsuit and issue a writ of garnishment on wages or bank accounts, or place a lien against real estate with the hope of payoff with a future sale or refinance.  Not as much of that going on these days, so we have to look at other potential assets.

We have done sheriff foreclosure and sale on real property, snowmobiles, motorcycles, and other vehicles.  We have pursued a horse valued at $25,000, a truck full of tools, a building full of tools, and restaurants with a few plates and forks.  The problem with many of these is they are not owned by the debtor free and clear, the IRS has liens, it will cost more than the value of the asset to foreclose and sell, or the debtor files bankruptcy before we can take possession.

When people are working and have cash-flow they buy toys like these, and when there isn’t cash we can take and sell the toys, but they aren’t worth much on the foreclosure market.  It’s difficult, time-consuming and expensive work, but sometimes it is the only way to get anything paid on the debt.

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