- What is "delinquent debt"?
For our discussion, "delinquent debt" is debt that is more than 180
days old on which payments are no longer being made, and has become a
"write-off" or "charge-off" on the
company's balance sheet. This is also sometimes referred to as
"non-performing" debt.
- What types of "delinquent
debt" can I sell?
The following types of
delinquent debt can be sold.
- bank credit cards
(Visa , MasterCard, Discover, etc)
- private label credit
cards from retailers and department stores
- consumer installment
contracts (furniture, jewelry, appliances, membership clubs, and
rent-to-own)
- medical receivables
(the patient pay portion or the uncollected insurance portion)
- commercial
receivables (business to business invoices)
- student loans
(colleges, universities, truck driving schools, beauty schools,
business schools, computer schools)
- deficiency balances
(the balance still owed on repossessed merchandise)
- judgments and
discharged bankruptcies (must be part of a portfolio-cannot handle
standalone judgments or bankruptcies)
- utility debt (gas,
electric, water, telephone)
- bad checks
(insufficient funds, closed accounts)
- How much delinquent debt do I need to
have before I can sell it?
Delinquent debt
portfolios as small as $300,000 can be sold. However, portfolios
of $1
million
or more are generally preferred.
- What is a "portfolio"?
For this discussion a
"portfolio" is a group of delinquent or "charged-off" accounts whose
total value exceeds
the
minimums mentioned above. These are also sometimes referred to as
"pools" of delinquent or charged-off accounts.
- Is there a minimum value for the
individual accounts contained in the delinquent debt portfolio?
Yes, the minimum average
account value is $500. Larger account values are
preferred.
- How old can the accounts in the delinquent
debt portfolio be?
Each state has a "statute
of limitations" on how long a debt can be collected. The range
is
3 to 15 years with most states being somewhere in the middle.
- What is the value of my portfolio
of "charged-off" accounts?
Every
portfolio is different. In general, portfolios of
"charged-off" accounts are bought for pennies on the dollar (some sell
for fractions of a penny on the dollar). Accounts on which
payments are still being made may have a higher value. The best
way to find out what your portfolio is worth is to get a no obligation,
free quote from Chestnut Hill Funding.
- Will you buy accounts on which collection
has been attempted one or more times?
Yes, as long as no final
settlement was reached with the account debtor, and the account debtor
is still alive.
- Will you buy accounts that have not been
"written off" yet?
Yes. These accounts
are typically what are called "sub-performing" accounts. The
pricing on
"sub-performing " accounts is usually better than that received
for the
"non-performing " accounts making up most of a
delinquent debt portfolio.
- What information do I need to provide to
get a
quote on the value of my portfolio of delinquent accounts?
The following information
is needed to give you a quote on value of your delinquent debt
portfolio.
- owner of the portfolio
- face value of the portfolio (the sum of the balance
due on all accounts in the portfolio)
- the total number of accounts in the portfolio
- the average balance of the accounts in the portfolio
- warranty on the accounts
- date of last payment on each account
- date the debt was "charged off" for each account
- the state in which the debt was incurred (needed to
determine if the debt is still within the statute of limitations)
- the number of times collection was attempted on the
debt (either people within the company or by outside collection
agencies)
- type of documentation (signed contract, signed sales
slip, signed delivery receipt) showing the debt is owed by the
debtor
- is the documentation for the debt available
- collateral (if any) and its value
- if the debt was for merchandise has it been
repossessed and resold (if so, for how much)
- In what form do you want
the information?
We prefer the information
as a computer disk. Hard copy information is also acceptable.
- I noticed there was no
information identifying the debtor in the information specified above.
Don't you need that information?
Account debtor information
is not needed to provide a quote on the value of your delinquent debt
portfolio. If you decide to accept the quote and sell your
portfolio, then it will be necessary to provide identifying information
and documentation for each account debtor.
- What do you mean by
"warranty on the accounts"?
When you provide a
"warranty on the accounts" you are saying that the accounts in the
delinquent debt portfolio are 100 percent collectible. What this
means is the following.
- the account debtors are alive
- the debtor has not gone bankrupt
- there is no fraud on the account or litigation in
progress on the account
- no settlement has taken place on the account
- the accounts are within the statute of limitations
If any accounts
are found where any of the above conditions are not true, then those
accounts are deducted from the value of the portfolio, or they can be
replaced with other collectible accounts. Delinquent debt
portfolios can also be sold without "warranty" . This is also called
"As Is". In this case the buyer of the portfolio bears the risk
of non-collectible accounts.
- If I like the results of
selling my delinquent accounts, can I sell more in the future?
Yes. This is
called "flow forwarding". When both you
and the buyer of the delinquent accounts are happy with the results,
then an on going relationship can be created where groups of delinquent
accounts are sold periodically.
If you have additional questions, or if you would like to start the
process to get a quote on the value of your delinquent debt portfolio, please click here to
contact us.
Call us now at 1-800-598-1178
to get started.
|