Anybody ever sell bad debt?

[Southside]

Ahh - the joys of owner financing.  So we have a property that we owner financed that I am foreclosing on and taking back next week.  Tried to work with these people for the past 6 months, and after the repeated stories and lies enough was enough.  Sad thing is they have the income, just not the discipline to keep from spending it on a bunch of toys and they believe you can walk away from a contract all the while dictating the terms of how things are going to go.  Uhh - I think its time I begin to act like "Sorta Mr. Craig". 

As a result of this exercise they owe us a significant amount of money.  I don't think getting a judgment against them will be very difficult at all given it was all in a contract and I have followed every part of the contract and gone above and beyond numerous times.  The question is what to do after it is all done next week.  I don't have the time to deal with chasing them and playing debt collector all day long, so if it means giving up a good chunk of the face value I am fine with that since I will have the asset back. 

Has anybody ever sold a bad debt to one of the companies that advertises buying such things?  Any idea what % is paid to the creditor?  Any recommendations on who is good to deal with in this realm? 

Live and learn I guess, but it really is discouraging.  I have had folks who owner financed to me in the past and that personal relationship is the number one reason I was never late or gave them the slightest reason to worry abut getting paid.  Sad reality of our times, never again. 

[so il logger]

Sorry to hear that..I have been in the same predicament, the tenant or lessor wins. They walk away, granted with bad credit...but you unfortunately will have to pick up the pieces. Costed me plenty of money to try and prove a point... and set good values, but left me with the bill and them about theyre own fun time's. System does not work for the working guy.... Least not around here. Good luck bro

[Raider Bill]

get a judgement against them at the same time you do the eviction. Once you have that garnish their wages.
Not hard to do here in Florida.Sadly I have to do this from  time to time.

Was this a rent to own? Most time RTO is a fools bet for the renter and a good thing for the owner.

I sold a Pizzaria twice like that. Got big down-strokes knowing pretty much it wouldn't go full term. All in all I got my money back.

I tried to get a collection agency to go after AIG when they bellied up in 09 owing me $65K but that didn't go anywhere.

[Magicman]

Yes, I had to foreclose on a property a couple of years ago.  It was touch and go for a while because another buyer came forward almost too soon and getting a clear title came down to within days of the new sale/closing date. 

[Southside]

Sort of a rent to own, it was structured as a land contract, does have a house and garage on it, they had 10 years of payments, with a balloon at the end, I retained title and gave them possession only. On paper they earned equity but it did not apply until the whole note was paid off.  I did have an exclusionary clause in it that if they defaulted they get nothing, so I am well positioned there.

A part of me thinks this was an orchestrated scam the way things happened, boyfriend / fiancee / kids dad left her a month or two after we made the deal and she wanted him removed from the contract - he never contacted me and I never allowed that - then she had financial troubles as a result - then he comes back into the picture, they are going to get a bank loan, then she is fired, quits the new job to go back to the old job after a month or two, was getting a big tax return and would catch up on the payments, then all contact stops and I get a text that says they are walking away and they think their down payment makes up for the missing payments, oh and they will come back in a month or two and collect their toys......

So I have to make a long drive next week and finish taking care of things, I suspect it will be interesting.

[BradMarks]

I think at best you would do well to receive 30 cents on the dollar, and only if it is a successful collection.

[Southside]

Of course there is damage to the house, use your imagination and it is there, to top is off they left me a dead horse in the yard, a DanG dead horse.....

[Glenn1]

Sounds like they were classy people.  Sorry to hear about your situation. 

[VictorH]

Depending on how/why the horse died they could be in criminal trouble over that.  I'd report it to the authorities.

[WH_Conley]

Sounds like the last tenants on a rental house I own. Moved out, didn't know anything about it til a few days later. Took the water lines with them. They were Copper. Said they were there when they left. City trash service, had to carry it about 40 feet from the house. Decided to let several months worth pile up in the garage. Yeah, they stopped paying rent to. Attorney said not worth it to try to collect. They have nothing to tie up. Small claims is a joke. Get a judgement. They don't pay, another $25.00 filing fee, go before the judge, he pays $5.00, Judge says OK, he doesn't pay so there is another filing fee. A no win situation.

If the house is not torn up you are probably about as well off as you are going to be. I don't know about other states but Kentucky has a formulas for Garnishment(sp) of wages, I knew one guy that had a court order against him and there was only about $2.00 dollars took out of his check. I told him that if I had to do that paper work again he was out of a job.

I know it leaves a bad taste in your mouth but sometimes you just have to walk away and shake your head.

[jssmitch]

Southside Logger,
I went to a debt buying school several years ago in Fl.  What you are looking at is the buyer of the bad debt figures the money worth at say some point in the furture.  In your cast that could be bad as they walked on the debt which will cause most debt buyers to walk as well.  They look for a contract to buy that has been paid on time every time for several years, or something like lotto winners wanting to collect a 25 year payout in one lump sum.  Debts that they know will be paid, then they figure the worth of the money at that point plus the interest that they want to make which most figure in about 30% profit.  There is a caculation for that, but it slips my mind at the moment.  I don't think from what you have told on here that a debt buyer will be willing to help you much at all.
Sorry for the bad news, but that is pretty much the way the debt buying works.
Good Luck.