Have you ever wondered how much debt collectors paid for your debt? Knowing their investment in the debt can help you know what they might be willing to settle for. The answer might surprise you!
Newer debts are normally purchased for less than 15% of the total outstanding balance. That’s less than $150 on a $1,000 debt. If the debt is older, then it sells for even less. A debt that is so old that the statute of limitations has expired may sell for as low as $8 on a $1,000 debt balance!
If you are being hounded by a debt collector and would like to consider settling on a smaller amount, then consider that they can still turn a profit even if you only pay 20% of the balance. However, they know that if you can pay 20%, you can likely pay more.
That is why most collection accounts can be settled for 40-60% of the outstanding debt balance. The older the debt, the more likely you can settle for a smaller amount.
If you have old collection debts, find out more about the pros and cons of debt settlement. There are more cons than pros, so make sure that your situation requires debt settlement before proceeding!
Tags: Debt collection prices