What Percentage Is A Debt Sold For

[Oh Boy!]

Is there anyone that can assist all members with either a web link or confirmed percentage that is used to buy debt from banks.

 

For example a £1200 debt from capital one sold to Robinson Way would be sold for ????? how is the percentage worked out, i am sure that if members new how much their debt has been sold for they can negotiate better.

 

Answers please Ladies and Gents

[rory32]

How much (or little) the debt has been sold for bears very little relevance to how much will be accepted as full and final offer. Things of far more relevance are have you been on reduced payments for a long period of time, how long is it since you last made a payment on the account? Debts are often sold for between 10-20% of the balance, this however does not mean that you can settle at this amount. Debts are often settled for around 60-70% of there value even after being sold.

[gizmo111]

I reiterate what Rory has said absolutley, how much it has been sold for is irrelevent to what you settle for. Whilst I know most people will not like this comment it must remembered that DCA's are a business with employees and overheads, and the debtor owes the money, (once the full amount has been clarified) so any reduction is a bonus.

 

CAG does not and never will condone debt avoidance in any form.

[Hippy-chick]

I reiterate what Rory has said absolutley, how much it has been sold for is irrelevent to what you settle for. Whilst I know most people will not like this comment it must remembered that DCA's are a business with employees and overheads, and the debtor owes the money, (once the full amount has been clarified) so any reduction is a bonus.

 

CAG does not and never will condone debt avoidance in any form.

 

Gizmo

 

I totally agree with both you and Rory.

 

Surely the best way to negotiate a settlement is to get a full statement from the creditor. That way the debtor can see that any charges are only those which any reasonable business would charge. Of course, none of us should avoid paying debts that we owe. However, one should always have a full statement of what one is paying before settling.

 

So, thinking as I type, if the DCA has paid less than the full value of the original debt, that should be made plain on any statement. Then reasonable costs should be added on top.

 

But this should only be the case for rogue debtors.

[rory32]

So, thinking as I type, if the DCA has paid less than the full value of the original debt, that should be made plain on any statement.

There is no legal requirement for this. While any charges should be claimed back, the original amount minus any charges is still the outstanding balance no matter the amount that was paid for the account.

[Hippy-chick]

There is no legal requirement for this. While any charges should be claimed back, the original amount minus any charges is still the outstanding balance no matter the amount that was paid for the account.

 

Yes, Rory, you are right.

 

I'm not advocating avoidance of debt. I think that if it's owed, it's owed. And, of course, you are right. If the debt is owed, is does not matter how much a third party pays for it. The fact remains that the original debt was incurred by the debtor, and is still owed. That being the case, ceteris paribus, the DCA can charge a reasonable amount for collecting on said debt.

 

But ... If the DCA had bought the debt for 10-12% of the original, you'd think they could still collect the original debt and still make a reasonable profit?

[rory32]

In principle I agree with you but part of the reason that DCA's buy at such a knock down rate is that they won't collect on every account. While I despise a lot of the tactics used by some DCA's they are in business to make money, so the price they paid for an account is irrelevant. They may have bought an account for 10% that they can collect on but bought another account at the same rate that they can't.

[Hippy-chick]

In principle I agree with you but part of the reason that DCA's buy at such a knock down rate is that they won't collect on every account. While I despise a lot of the tactics used by some DCA's they are in business to make money, so the price they paid for an account is irrelevant. They may have bought an account for 10% that they can collect on but bought another account at the same rate that they can't.

 

Again, Rory, I agree. Any business has to make a profit. I also appreciate that a DCA will not be able to collect on every account. If it is not the case that a DCA can buy debts at 10-12% of the original and still collect on enough of those to make a profit, I think this would be reflected as fair costs.

 

So, I guess I'm going to concede and agree that all the DCA should mention in its statement is just the original account and reasonable costs on top of that.

 

Gee.

 

[Oh Boy!]

Well we have established that everyone agrees with everyone and we should all pay our debts which a big % of people here do and want to thats the idea of CAG, that is, to pay the debt, but its the way it is collected that has spawned some parts of CAG, and of course to fight back greedy banks.

 

The idea was to work a rough percentage that all DCA may or may not buy the debts for, so that you can offer a FFS (full final settlement) that they make look at and say mmmmmm... ok.....or may be not.

 

Cap One sold debt to Robinson Way, Original Debt £640 after purchase Rob Way accepted £280.00 FFS which was a massive reduction I paid Pronto!

[Hippy-chick]

 

The idea was to work a rough percentage that all DCA may or may not buy the debts for, so that you can offer a FFS (full final settlement) that they make look at and say mmmmmm... ok.....or may be not.

 

 

I think Rory answered this in post two in this thread.

[Belaflat]

Its been said before but what really gets my goat about all this is why the original lender wont settle for the same amount of money they sell the debt for or even a little more.

If a £5000 debt is sold at 20% and they are happy, why not offer the chance of say a 40% settlement before the debt is sold on.

 

Company is better off, debtor might find hard times a little easier to overcome and the vultures dont get fed.