Buying and Selling Debt – Is There Another Option?

Buying And Selling Debt – Is There Another Option?

Selling debt to a debt collector has been an option for a long time. It is commonly used as a last resort when it is no longer economically viable to continue an ineffective credit control strategy. For example, if a business has a large portfolio of debt that they are unable to recover themselves, they may attempt to sell this to a debt purchase company.

However, selling a debt will only recover a drastically small amount of money compared to what could be claimed back with a more effective collection process.

Most companies that seek to buy debt are a special type of debt collector. They make money by buying old debt at a low price, to then use their expertise to collect the full amount later and make a profit.

As such, these agencies often use overly aggressive tactics to recover what is now owed to them, and has been described as a “grimy business”.

Whilst the original creditor may be in a difficult position, selling off their owed money to a debt buyer may not be the best solution. Many people are unaware of what options are available to them when it comes to debt collection, and as such may unknowingly sacrifice their chance to recover all of the debt.

We asked our in-house debt collection experts about the negative side of selling debt, and what the alternatives were for recovering owed money.

Buying And Selling Debt – Is There Another Option?

Our team of Debt Collection Experts are happy to help with your enquiries.

Buying And Selling Debt – Debt Purchase vs Debt Recovery

The process of selling debt is very simple. The original creditor agrees to pass the debt over to the debt buyer for an agreed amount who then inherits the debt. It may be surprising to find that people are willing to buy debt, and many people are more than happy to sell it when they have had no success recovering it.

However, the debt buyer is normally a debt collector, who will then go on to take every step to recover the full amount of the debt for themselves. Needless to say, finding out that the full value of the debt was recoverable after all is a hard pill to swallow.

However, there is an alternative option in the form of instructing a debt collection agency. This is regarded as a better option, as it allows the creditor to recover the maximum amount possible, whilst being cost-effective.

A professional debt collection agency will operate on a low-cost commission-based structure, and provide an effective service. Success rates are normally very high, with our partners achieving a 90% average collection rate on undisputed debt.

As well as this, the leading debt collection agencies provide a fully regulated and accredited service. For example, one of our award-winning partners registered in England is the only agency to be regulated by the Financial Conduct Authority (FCA).

Whilst there is a cost to using their services, a debt collection agency provides an effective recovery option for those who are struggling to collect owed money. This means that you would be able to recover the maximum amount possible, instead of selling debt for a very low value.

How Much Does Debt Recovery Cost?

The cost of collection depends on the circumstances of the debt itself. Every case is unique and must be priced according to its own merits. Having said that, it is common for debt collection agencies to operate on a commission-based model. For more information, speak to one of our award-winning members today.

How Long Does it Take to Collect a Debt?

Again, this very much depends on the unique circumstances of the debt in question. The length of collection may depend on the complexity of the debt. For the best estimation, speak with one of our partners now.

Can a Personal Debt be Recovered?

Yes. There are many debt collectors that specialise in private debt recovery. Despite the initial cost, it is often more beneficial to use a private debt collection agency instead of selling your debt. In doing so, you will have the best chance of recovering the maximum amount possible.

What Are the Chances of my Bad Debt Being Recovered?

Every case of debt collection is unique, and each one has its own set of circumstances. When you begin speaking with one of our partners, they will perform a free assessment of your debt. This evaluates the recovery chances and gives you a clear idea of what to expect.

Is There a Cost to Speaking With a Debt Collector?

Whereas some solicitors and agencies will charge for a consultation, our award-winning partners will perform a completely free consultation and debt appraisal. Regardless of the reason you are owed money, be it an unpaid invoice or credit card fees, contact us today for our recommendations.

Buying And Selling Debt – Is There Another Option?

Our team of Debt Collection Experts are happy to help with your enquiries.

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