How to collect bad debt

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How to collect bad debt

Postby MrBHPH.10994 » Sat May 04, 2013 6:44 pm

I've been doign the BHPH thing for a short time, and plan on expanding and doing this for a while

Generally when the people don't pay I repossess the vehicle and don't go after the bad debt.

But as you start crushing the numbers you realize that the people that when you have to repo a car and then re sell it, you don't make anything.

For example let's just say the people paid $1500 and you had to repo it.

$1500
- $200 repo
- $100 registration
- $500 depreciation
- $400 reconditioning
- $150 sales commission
_________________________________
Profit $150

So you made $150... on of course you had to deal with the people the whole time.

I want to go after this bad debt.
I understand that in order to go after the bad debt you have to sell the vehicle (at auction) get a deficiency and sue them

1) Is there a way you can do this buy obtaining what it would bring at auction (MMR of manheim) and reselling it?
2) is there a company / service you recommend?
3) is there any sample docs or anything out there?

Thanks
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Re: How to collect bad debt

Postby combs.3602 » Mon May 06, 2013 10:58 pm

Hello - There are alot of problems going after the customer.Yes,you must sale the car for a deficiency,you cannot buy it yourself or just obtain a value,it must be sold.Your customer would need a very good job,one they wont quit when you get a judgement.You realize that you need to take them to court,most likely via an attorney(you can do it yourself,but then you wont be running your car store) and prove your loss.Its very expensive, and ,you will need to go to court and get a new judgement everytime they quit their job.Oh,and dont forget BK.BHPH folks will file at the drop of a hat.Ofcourse you will need to replace the car,and I find that my cars wont bring as much money at auction as do the new car dealer trades that I usually buy,so it ends up costing me more money.I have never gone after the person unless they have destroyed the car.I believe the best thing to do is re-sell the car.It is quick,simple ,and you might have it sold to a better customer for the same or more profit before you could even get the judgement petition filed.Remember that repos are what keeps BHPH profitable.We have sold some cars up to 3-5 times. :D Dennis Combs Boise
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Location: Nampa and Boise,Idaho


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