Unlocking Value: A Guide for Selling Consumer Debt
Author: Matt Stone
Consumer lending offers lucrative opportunities but also comes with inherent risks. While the majority of borrowers fulfill their financial commitments, some loans inevitably become charge-offs, impacting your profitability. What if you could liquidate these non-performing loans, all while safeguarding your brand and bottom line? Enter EverChain’s platform, designed to facilitate the sale of consumer debt to debt buyers. EverChain empowers lenders to maximize profitability without compromising brand integrity thanks to our comprehensive sale and post-sale platform.
Why Lenders Should Consider Selling Charged-Off Debt
Immediate Cash Flow for Creditors
One of the most compelling reasons for selling charged-off debt is the immediate cash influx it provides. This liquidity can be reinvested in profitable ventures or be used to strengthen other financial positions. The key benefit here is predictability. Waiting for payments from charged-off accounts that may never come could mean missing out on selling the debt before its value diminishes significantly.
Bottom Line Impact
Selling debt can have “bottom-line” impact. These charged-off accounts once considered bad debts affecting your financial statements, can be partially recovered by a third party, enhancing your organization’s overall financial health. Recovering even a fraction of the outstanding balances can positively impact quarterly results, return cash to your core business, free up internal resources, and reduce operational costs.
Multiple Recovery Channels
Effective debt recovery requires a three-pronged approach: collections, litigation, and debt sales. While you can maximize early-stage recoveries through collections and litigation, selling more challenging-to-collect debts can be the game-changer. The reality is that most creditors are not equipped to handle long-term challenging collections. This is where specialized debt buyers and technology-based collection firms come into play, allowing lenders to focus on what they do best.
What Debt is Eligible for Sale?
Portfolios of unsecured debts like credit cards, personal loans, automotive, Buy Now, Pay Later (BNPL) loans, and other alternative consumer finance balances are eligible to be sold. These must be legally enforceable, meaning all documentation is complete, and they haven’t surpassed the statute of limitations.
Who to Sell Debt To?
A strategic debt buyer is more than a transactional collaborator; they are an extension of your values and mission. They balance debt recovery with borrower respect, understanding that each debt reflects a unique financial situation that deserves empathy. This is why EverChain emphasizes not just compliance and efficiency, but also ethical practices in selling defaulted loans. Members of the EverChain Certified Debt Buyer Network have already undergone an advanced review, which enables us to move through the deal process quickly and efficiently.
When to Sell Debt Accounts?
Time is of the essence. Borrowers may file for bankruptcy protection or move and cannot be located. The earlier you sell, the higher the market value. Keep an eye on the aging of your debts; older accounts are harder to collect, decreasing in value over time, so it’s important to sell before the point of diminishing returns.
The Value of Utilizing a Broker and Platform
While you can independently sell debt, a broker ensures compliance, safety, and efficiency. EverChain offers a way to sell charged-off accounts with minimal fuss. Moreover, a specialized platform reduces post-sale activities like complaints and buy-backs, enhancing your brand’s reputation and making your debt portfolios stand out in a crowded market. Unlike other brokers, we stick with you until the last collection call is made.
By diving into debt sales with EverChain, we introduce you to debt buyers who align with your mission and values. In doing so, you improve your bottom line and secure both your reputation and your borrowers’ future.
Explore the intricacies of debt selling with EverChain to realize its full potential. upgrade your recovery strategy with EverChain the only full-service sale and post-sale partner.
EverChain facilitates compliant and secure debt sales for lenders and other creditors. We enable creditors to manage and monetize their uncollected receivables via our secure, sophisticated, and specialized technology platform (patent pending) consistently and compliantly. We aren’t simply a conventional broker or a buyer; EverChain is an experienced debt sales advisor with the expertise to help creditors optimize their recovery strategy while protecting their consumers, brand, and bottom line.
A successful debt sale should not be measured by how much money you sell your accounts for, it should be measured by how much you get to keep. Creditors concerned with any post-sale compliance risk can rest assured that the EverChain network holds itself to the highest standards of care. This ensures that creditors selling their accounts on the EverChain marketplace to our certified network of buyers can expect unprecedented and unparalleled levels of compliance from buyers, their agencies, and law firms.
Contact one of our dynamic team members today or schedule your free consultation here.