By Rachel Remley
The Ins and Outs of Selling Accounts
Selling charged-off receivables requires patience, diligence and documentation
F or some creditors, selling
delinquent receivables is a
routine part of the debt cycle
that can result in immediate cash flow.
However, determining when to sell
accounts in-house for three months.
Steven Theisen, asset recovery manager
for Sun East, said the company has cut
back on its outsourcing by working the
accounts in-house before getting ready
outsourcing the accounts to an agency.
QC streamlined its process to include
debt sales once a month.
“At some point, you’re going to
have to sell those off,” McCarty said.
accounts, how to make a portfolio to sell. “It’s the last phase of our overall
attractive to debt buyers and which “It’s saved us 25 to 30 percent in recovery strategy.”
agencies to sell to requires a certain recoveries,” Theisen said. “And when According to McCarty, adding debt
level of diligence. we sell at a decent rate, we see a higher sales to your recovery plan may
Creditors can create a new revenue recovery than if we just kept placing the increase the bottom line by 3 percent
stream by selling their charged-off accounts before selling.” to 5 percent each year, which can lower
receivables after exhausting internal Theisen said collectors put together net credit losses.
collection efforts. Jesse Broaders, a file of sellable accounts each quarter, Broaders recommends sellers
director of debt management for Check which has boosted their bottom line evaluate accounts as they go to
N’ Go in Cincinnati, said the considerably. determine which accounts should be
company’s in-house collectors work “After working it in-house for a sold right away. In some instances,
accounts for 60 days before while, you have to predict what you can buyers will request accounts based on
determining the next course of action. do after that and how much you can get the region in which they originated
On day 65, they determine whether the out of those accounts,” he said. because they have previous experience
accounts are placed at a collection Since Sun East started selling collecting in that region or because
agency, sold to a debt buyer or require accounts, Theisen said the company has they know the recoveries will be higher
legal action. increased recoveries by 25 percent to 30 in that area.