Delinquent Debt Portfolio FAQs
Q: What is delinquent debt?
A: Basically, delinquent debt is money that is owed, past the traditional 30-day period, by one party (the debtor) to another party, for goods or services rendered. Although debt over 30 days is considered delinquent, we are primarily talking about accounts that are still outstanding after 180 days. That is traditionally the point at which companies write off their debt--where they realize that the delinquent account may not be collectable.
Q: Who is involved in a delinquent debt transaction?
A: There are three (3) players involved:
- The Seller (debtee) - the company or institution that has delinquent debt that they want to sell;
- The Buyer (funding source) - the investor who will be purchasing that debt;
- The Payor (debtor) - the person who owes the money.
Q: Who buys delinquent debt?
A: There are numerous investors who specialize in this type of investing. USA Closers is both a representative of these investor groups as well as direct investor in delinquent debt portfolios.
Q: Will you buy individual debt, say a school loan?
A: No as we only broker or invest in large portfolios of uncollected debt that a collection agency couldn’t collect on which has been written off by the owner (seller)of the debt. For example we wouldn’t purchase an individual school loan, but we would be interested in a portfolio of thousands of school loans. We are interested in debt of all kinds. Credit and Student loans are only a snap shot of the different types of debt that exist.
Q: Will you purchase performing as well as non performing debt?
A: Yes. We purchase performing, non performing and sub performing pools/portfolios of delinquent debt
Q: What are the differences between performing, sub-performing and non-performing debt?
A: Here are the fundamental differences:
- Performing means that money is being received by the debtee from the debtor, but it could be up to 30 days late. These debts are normal and will usually not be included in delinquent portfolios for sale. There is always the exception when a company is going out of business and they are looking to sell everything at one time, but don't count on it. Portfolios including performing would, obviously, be worth more.
- Sub-performing debt is debt on which payments are being made; however, they are not meeting the contractual minimums established in the initial transaction or contract. They are 30-120 days delinquent. Depending on the seller, there are times that portfolios will include some sub-performing accounts because the seller doesn't have the time, or money, to chase the accounts. These would be priced less than performing.
- Non-performing debt is just that: no moneys are being sent by the debtor to the debtee. These accounts are 120 days, and more, past due, and are the ones that make up most of the portfolios that you will find for sale.
Q: Why would anyone want this type of financial instrument?
A: These accounts have either been already charged off by the company (usually after 180 days), or are very close to being charged off. We can help a creditor convert this written off debt into cash.
Q: What is the minimum amount you will consider?
A: The lowest we will consider is $500 per account say on $1 Million dollars in debt. If you are unsure please contact us to discuss your delinquent debt portfolio
Q: Would you be interested in purchasing our delinquent debt on a monthly or quarterly basis?
A: Absolutely. The technical term for this is called Flow Forwarding. If you would like for us to provide you with this service please call us directly at 212-726-1287
Q: Will you work with other brokers?
A: Yes. E-mail us the particulars of your deal so that we can speak frankly about it.
Q: I am ready to move forward, what is my next step?
We look forward to working with your company and helping relieve you of your uncollected debt
Sincerely,
Linda Jacobs
VP & Director of Operations
