How to Sell Debt

by Danny Donahue; Updated September 26, 2017
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Debt collection is monitored by local, state and federal regulations. A debt is considered noncollectable by most businesses when it reaches 180 days old. At that point, corporations will either move this debt to the back burner or write it off. Small businesses simply cannot afford to take this loss. Collection agencies can help your business by buying your debts for a lesser amount. This will reduce the amount of loss you must absorb while freeing you to pursue your business instead of spending your time doing collections.

Items you will need

  • Debts backed by legal contracts
  • Computer with Internet service
  • Phone
Step 1

Attempt to collect the debts owed to you on your own for 90 days. Take the contracts and records for each debt not paid to your local civil court and apply for a judgment on each debt. Attempt to collect on each debt until it is 180 days old.

Step 2

Gather all delinquent debts. Include copies of contracts, notes and records that pertain to each debt and include them in the file.

Step 3

Locate debt collection agencies and attorneys, most of which can be found online. Make a list of these agencies and individuals. Refrain from choosing debt collectors facing class action lawsuits for violating federal collection laws.

Step 4

Call and email each of the prospective companies and attorneys on your list. Tell them the total amount of debt and the number of contracts you are trying to sell. Choose which one you will sell to according to the price they offer and the promptness of their reply.

Step 5

Turn over copies of all records for each debt in return for payment to conclude the deal. Return to your files and remove the records you just sold from your debt list. Remember not to contact those debtors any more because they now owe money to the collection agency and not to you.

About the Author

After learning electronics in the U.S. Navy in the 1980s, Danny Donahue spent a lifetime in the construction industry. He has worked with some of the finest construction talent in the Southeastern United States. Donahue has been a freelance writer since 2008, focusing his efforts on his beloved construction projects.

Photo Credits

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