Portfolio Management: Maximizing Debt Sale Returns in One Simple Step

Companies that sell their portfolios of charged-off accounts separately from their portfolios of bankruptcy receivables might not be maximizing their debt sale returns. Bundling both types of accounts together can result in greater sale returns.

The Benefits of Bundling Asset Classes

We frequently see sellers miss out on greater sale returns when they manage their charged-off and bankruptcy assets separately. Doing so overlooks the benefits of a combined opportunity – which leads to both greater sales values as well as significant operational savings.

Leading debt buyers and receivables management companies are able to buy and service both charged-off and bankruptcy accounts as a package. When the assets are bundled, sellers can take greater advantage of economies of scale, leading to a larger sale and servicing opportunity for the buyer. In simple terms, the bigger the deal involving multiple asset classes, the better the buyer’s ability to maximize the sale price by balancing its margins.

A buyer with expertise across multiple asset classes uses their resources to ensure optimal servicing of the assets, and in turn passes on the benefits of an efficient cost structure to the seller.

Streamline Processes with a Single Point of Contact

Partnering with a buyer for both charged-off and bankruptcy receivables greatly simplifies the process, providing a single point of contact for a smooth transition of assets. This one-stop collaboration often leads to improved value creation. Taking it one step further, establishing a forward-flow arrangement also results in predictable cash infusions across multiple lines of business.

Working with one buyer for multiple asset classes also saves time on negotiations and administrative activities required for each asset. Companies that sell their charged-off and bankruptcy receivables separately to different buyers are required to deal with multiple systems and touchpoints, which consume the seller’s valuable time and resources. Consolidating all sale files with one source simplifies internal processes, offering a strategic advantage for the seller.

Expand Service Scope

A buyer who is an expert in both charged-off debt handling and bankruptcies can offer a variety of solutions whether it’s a debt sale for immediate cash proceeds or third-party servicing such as a comprehensive bankruptcy processing services. These services might include reviewing the creditor’s bankruptcy hits and supporting documentation, preparing and filing proofs of claims, receiving and processing payments, and managing correspondence. By outsourcing these tasks and receiving a higher price for all assets, sellers can reallocate their workforce to more valuable tasks.

The Wrap

Sellers of receivables who are looking for innovative ways to increase the value of their accounts should consider all of their delinquent assets as a collective opportunity. This approach can provide greater pricing and returns, improved operational efficiency, and leads to more predictable and long-term financial liquidity for their accounts. They should work with a purchaser that is capable to meet all of their needs in a single transaction.