Debt Purchase

Whilst pre-legal debt collection is one option, debt sale maybe another that is worth considering which can save your business money and generate cash flow. Despite the range of debt collection methods available to businesses, when a customer defaults on their agreement to make payment, there will be those that are too problematic, time-consuming or costly to recover by using in-house collections processes and formal litigation action would be too uneconomical.

Debt sale offers businesses a useful alternative other than to simply writing off unpaid debts. When the decision has been made not to invest any more time and resources into chasing customers for payment, debt purchase companies are able to purchase the debts from a business, by assigning the debt to the Assignee and a formal Notice of Assignment would then sent to the Debtor advising them of this change.

This tactic ensures that a portion of the overall value is recouped immediately by the seller, freeing up its resources chasing payment and receiving a cash injection, improving liquidity of the business.

We have considerable experience in assisting clients in debt sale and debt purchase or collecting on all types of debt purchase accounts, vehicle finance, unsecured loans, and mortgage shortfall. We have built excellent partnerships with financial companies and we have also formed an excellent client relationship with a specialist Debt Purchaser, enabling DebtLaw uk to support a range of transaction types. These include: -

• Spot Sales – The completion purchases on pre-determined debt portfolios at a specified completion date.
• Forward Flow – On-going contracts where DebtLaw uk have acted over a fixed term, or on a rolling period.
• Advisory Services – Our team can rapidly assess your situation and arrange the purchase of individual debts or portfolios.

If required, we can provide a full consultancy and guidance service as part of the debt sale process. In addition to this, we offer advice and support to help you through all stages of the debt sale process, from cutting the file through to due diligence on all parties involved to contract implementation and designing structures for supporting on-going requirements.

Benefits of selling a debt. Debt purchasing offers many benefits, with the main advantages to a creditor being:

• immediate resolution of delinquent accounts.
• removal of bad debts from your balance sheet / ledger.
• improved cash flow.
• reduction of time and expense placing accounts in the collection process.
• your business can write the debt down and claim bad debt VAT relief.

The types of debt include but are not limited to:

• unpaid goods and services.
• rent arrears.
• unsecured loan.
• default on loans including bridging loans.
• trading debts.
• mortgage shortfall.
• hire purchase.