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It is not uncommon for creditors to place debt with two or three (or more) collection agencies and attorneys and then discover, much to their chagrin, that the debt has resisted collection, even after months or years. It is a fact that over 70% of all debt written off continues to go uncollected. What can a creditor do, at that point in time, to avoid taking a complete loss? Are there any options left?
While it is true that the value of debt diminishes over time, even the “deadest” of “dead-end” debt is never entirely without value, as long as it falls within the applicable statute of limitations. If there is some prospect of recovering the debt, however remote, that debt is worth something. However, once the age of the debt falls outside the relevant statute of the limitations, it becomes legally unenforceable, and it’s value plummets.
It is fairly common practice for larger institutional creditors to cash out on their debt portfolios after they have run their course. In the collections business, this type of exchange is often referred to as “debt factoring.” Debt factoring gives clients the opportunity to wash their hands of difficult debt that has been on the books or written off for years. specially when the clock is ticking and they’re eager to recoup at least some of their money. Contact our office to find out if Debt Factoring may be a viable solution for your older warehoused receivables.