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I am a landlord who got a settlement via garnishment of my ex tenant's account. The total of money owed came to about $30,000. I have collected about $11,000 and would like to get cash for what is left. The money is consistently paid every two weeks and the debtor has had the same job for more than 20 years, so it is quite secure. How I can get what is left in a lump sum?

yoozer8
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Yogirl
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3 Answers3

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Have you considered contacting the debtor directly and offering them a cash settlement? If they have any money set aside, they may be minded to accept a discount in return for giving you a lump sum. Instead of accepting pennies in the dollar from a "settlement services" company, you could end up gaining a much bigger chunk.

Dear Debtor,
As you have been successfully making payments now for x years, I would like to offer you the opportunity to make a full and final settlement by making a single cash payment of $whatever. This offer is made without prejudice. You are under no obligation to accept and you are free to continue making payments as before. Please note that failure to accept will not result in this discount being applied to your previously agreed settlement figure of $xyz

I look forward to hearing from you in the next 30 days if this is of interest. If you do not respond, I will assume that you simply wish continue the present arrangement.

Yours etc,
Landlord.

If you start off with quite a high figure (say, 85% of the final settlement), the debtor, if they've got any sense, will try to haggle you down to a more friendly number. You simply need to decide how low you're willing to go.

The great thing is that with a settlement order in place, there's very little risk to you since you can always turn around and say "sorry, too low" and the existing order will remain in place.

Community
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Valorum
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    This should be the preferred answer. Negotiating directly with the debtor over such a small debt is likely to provide landlord with a much higher payout. It eliminates collections/due diligence costs, and information asymmetry risk. The debtor may jump at a relatively small discount. And if a deal can't be reached immediately, it opens the door to doing this later when the debtor gets in a better financial situation. – SafeFastExpressive Jan 04 '19 at 21:43
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    I expect the debtor to say "am unable" or something to that effect. – Joshua Jan 04 '19 at 22:16
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    @Joshua - But asking them hurts nobody. If they say "no thanks", then it's no-harm, no-foul and OP can carry on collecting their money in little dribs and drabs. But for all you know, they may say "Ok then" and then OP has their money, minus a small discount – Valorum Jan 04 '19 at 22:26
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    "such a small debt", seriously? – Gras Double Jan 06 '19 at 01:04
  • @GrasDouble - See how the other half live, eh? – Valorum Jan 06 '19 at 10:19
  • @GrasDouble Think about all the costs in running a structured settlement business and you'll realize $19,000 is way too small to mess with. First, you need to spend hours or days on due diligence confirming the lenders story. Then a legal agreement. If the former tenant doesn't pay or lender lied you have court costs, or hire private investigators to find them. $2k of expenses on a $19k loan is more than 10%, but the same amount on a $100k loan is only 2%. Why mess with a little deal that has high relative costs/risk vs. it's potential profit? – SafeFastExpressive Jan 06 '19 at 20:40
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I won't list a specific one here, but there are tons of structured settlement companies that will buy your settlement agreement at a discounted price. You have probably see tons of these ads on daytime tv. I have never needed this type of service, but I can quote the phone number from memory because of those dang catchy jingles.

I suggest Googling "structured settlement" to find a few examples, but keep in mind you will be giving up perhaps as much as 15% of the money you are owed for this service. Other terms that might yield results is "Annuity purchasers" and "Settlement advance"

This website provides some information about how this process works.

JohnFx
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4

Your own bank may accept the note on this loan as collateral for another (probably smaller) loan to you; this is not quite the same as getting someone to buy the note outright, but would have the effect of generating some cash flow for you, while not devaluing the loan too much.

Of course there would also be interest on your loan, so you'd want to run some numbers first, but it is an option worth investigating.

jkf
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