Are you a creditor who has dormant debt, but has found some of your investments to be lying dormant due to unpaying clients?
If so, chances are that you are looking for a way to revive these investments and receive your return on investment! If this is the case, it may be time for you to consider selling your debt to a buyer to finally get paid and receive some value from your dormant investments!
Debt selling is a great alternative way for you to revive old debts and get your business back on track when you are struggling with recovering debts. It involves selling a debt of yours to a third-party buyer, who will pay you a percentage of the debt in exchange for the rights to collect it.
This can be highly effective in improving the financial standing of your business and helping you to expand and achieve! But how can debt selling help me to revive dormant debt investments?
In this article our debt buyers will discuss the several great ways that debt selling can help you revive old debts and bring your dormant investments back to life!
Understanding Dormant Debt Investments
The first step to understanding the benefits of debt selling for your dying investments is to understand what a dormant debt investment is.
A dormant debt investment is an investment that has remained within your portfolio for an extended period of time with minimal or no action towards it being paid back.
This can be a real headache and anxiety inducer for creditors, as debt recovery may be where they receive a large portion of their income! Debt can become dormant due to;
Lack of Collection Efforts
If a creditor has failed to make any effective effort towards recovering the debt, it can become dormant.
Debtors will notice if there is no action towards the recovery of a debt and will generally take advantage of this situation to not make payments on it either.
This can become an extended issue that results in dormant debt.
Aged Debts
Another reason that a debt may become dormant is due to the aging of it for one reason or another.
Maybe a debt is particularly large, or the debtor has continuously avoided payment.
A debt that has been in place for too long with consistent but ineffective collection efforts may be given up on, leading to it becoming dormant.
Unclaimed Assets
Debtors that have left their area or changed any of their details to avoid making payments may cause their debt to become dormant.
If this is the case for you, consider skip tracing.
Steps to Revive Dormant Debt Investments with Debt Selling
Now that you understand how debt can become dormant, your next question may be how you can revive your dormant debts with debt selling.
As we discussed, debt selling is highly effective in many means, but you have to take the steps to make it so!
Portfolio Assessment
The first step to reviving a dormant debt with debt selling is to assess your debt portfolio.
As a creditor, chances are you have a selection of dormant debts and some that are providing you with a great return on investment!
It is important that you carefully assess your debt portfolio to find the best debt or debts that you wish to sell.
When you have selected the debt, it is important that you effectively price the debt based on the amount of money it is worth and the difficulty of the debtor and debt to collect, as pricing your debt unreasonably will drive potential buyers.
Selecting the Right Debt Buyer
Another key step to reviving a aged debt with debt selling is to select the right debt buyer for you.
Make sure you are selling to the right buyer when you make your sale.
There are a lot of buyers out there, some of which will be more upstanding and effective than others.
Research buyers and sell to one that has consistently good reviews and a good track record of collection.
Due Diligence
Another key step to reviving a dormant debt with debt selling is engaging in due diligence regarding the buyer and the sale process.
There is a legal side to selling a debt. After all, you will be transferring the personal details of a client to the buyer, so it is important that you understand the legal side of the process.
Ensure that the buyer has all necessary legal regulations and does not have a history of violating collection laws, as this will reflect badly on your business also!
Negotiating the Sale
Another key step to reviving a dormant debt with debt selling is to negotiate the sale with the buyer.
It is important to be willing to engage in a negotiation process.
Make sure you are always prepared to negotiate with a buyer.
Have a good understanding of how negotiation works and what you are willing to negotiate and to what extent.
Ensure that you are flexible but are also holding your ground and are not taken advantage of!
Transferring the Debt
Another key step to reviving a dormant debt with debt selling is to transfer the debt to the buyer after payment.
Once the sale has been finalised and the money has been transferred, transfer the collection rights to the buyer.
Ensure that you always wait for the money to be transferred before transferring the debt, as the last thing you need is to not be paid for this investment either!
This will finalise the sales process and free you of your aged debt!
Monitor the Process
Another key step to reviving a aged debt with debt selling is to monitor the process.
Even though the debt is no longer your personal responsibility, it is still wise to stay informed on the collection process and how the buyer is going with the collection.
This can advise your sales choices in the future and ensure that the buyer is legally collecting the debt.
Key Takeaways
Dealing with debt investments can be difficult.
If you are consistently struggling to collect a debt and you feel that your investment is going to waste, it may be time to sell your debt to give your investment a new life!
Remember, debt selling is not for everyone and can be quite complicated, so ensure that you are knowledgeable about the process before deciding to sell your debt.aged