There are terms that you encounter as a real estate investor that can make you stop and think about the business of owning a property. Every landlord dreams of having the perfect tenant that will live for many years peacefully and pay rent on time. The reality is that that scenario doesn't happen all of the time. You could rent your property to a nice person and find out a short time later just how unfriendly this person could be. Lawsuits are not uncommon to have either for you or against you as a landlord. Knowing what is an eviction judgment can prepare you for the worst of the worst when you deal with a problematic current or past tenant in your investment property.
Most states have laws that are governed by landlord-tenant statutes. One common part is eviction. The process of formally demanding that a tenant vacate your property by a specific calendar date is an eviction. When you find that you have not been paid your overdue rent, you could seek an eviction judgment in court. A judge can hear your suit that you file against a tenant. A monetary judgment could be awarded to you if a judge rules that you are owned money due to damages or other financial loss you have sustained. A good attorney will always include the costs involved with pursuing unpaid rent and all legal penalties that are applicable in court.
A court can decide to award you a judgment after reviewing the facts of your claim. A tenant may or may not appear in court to counter any information about finances or damages. What happens when a judgment is official is that it can be submitted to collection agencies and reported on the personal credit report of a tenant. Most judgments can remain for many years and complicate the future rental approval of a tenant. Judgments are very similar to unsecured credit card debt or a foreclosure. Someone that does not pay what is owed can be pursued for many years in effort to resolve the debt. Your biggest asset as a landlord is keeping good records and contact information for every tenant. Someone that skips out of town on you that used bogus information in a rental application is frustrating and expensive.
Most of the time a bankruptcy will prevent collection efforts. A court only awards judgments. It will not pursue a tenant on your behalf. Depending on the amount of the judgment, you must decide if a future pursuit could warrant you spending more money for collections. A dependable and professional property management company knows how to plan in advance for tenant issues and can usually avoid having to resort to an eviction judgment. Bad tenants can and will happen and having an experienced management partner to help you is best. A property management company can also assist with third party collection efforts to avoid a lengthy legal process to seek an eviction judgment.