How To Sell A Debt?
If your debtor is late making payments to settle an outstanding debt, your debt collection agency may offer to buy the debt from you. For individuals new to the debt collection process this may raise a few questions:
What does selling a debt mean?
Why would I sell a debt?
Is it legal for me to sell a debt?
What Does ‘Selling A Debt’ Mean?
This is the process of passing the ownership of a debt to a 3rd party. This debt purchaser is typically a debt collection agency. Similar to any other sale, price and terms of service are agreed upon first.
The debt collection process remains the same even once a debt is sold. The debt purchaser will abide by the UK debt collection laws. The key difference is that your debtor now negotiates with the debt recovery agency and not yourself. As the debt purchaser paid you a percentage of the original debt, you will have received some of the outstanding debt. The remaining money, if any is collected, will belong to the debt purchaser.
Why Would I Sell A Debt?
Unpaid personal and commercial debts can be frustrating for businesses and individuals. It leads to unnecessary stress and cash flow issues. Some creditors just want to rid their hands of the debt collection to focus on running their business. Why not pass this responsibility onto the professionals to trace and collect?
Some creditors choose to settle debts solely based on financial reasons. If you require an immediate injection of funds and the outstanding debt is critical to the running of your business then selling debt is a great option. The debt collection agency or debt purchaser will provide you with an immediate settlement based on a % of the outstanding debt.
Is It Legal To Sell Debts?
The answer is - Yes. Selling debt to a third party debt recovery team is a common occurrence. You should always seek legal advice and liaise with a debt collection solicitor before making a decision. We offer a completely free service that introduces you to a number of specialist debt recovery agencies to suit you.
