How much are collection agencies paying to buy bad CC debt in this environment

[mickseven]

Do the collection agencies actually buy the bad CC debt from issuers and banks for cash. If, so i'd think the actual amount banks are getting would have to be absurdly low. I get the letters from the banks saying they are going to write-off my account and then sell it to a collection agency. Each quarter banks are announcing billions in write-offs. Can they actually sell all those accounts and how much would anyone pay for them.

I think some banks own a collection agency so it might just be a paper transaction. But seriously, you could probably buy a million dollars of bad debt for $10k.

Anyone in industry know what going rate is? Just curious.

[catleg]

I believe it is running about 5 cents on the dollar. I'll bet that they hold back the better stuff at that rate, they would have to be pretty sure they're not going to get anything to sell it that low. In other words I don't think the big national firms are selling everything off at that price right at the 180 days late when they charge it off. Chase and Cap1 are active litigants around here. I'd guess they have a model and the stuff that goes out at that price is considered to be borderline-BK, either already filed or will file as soon as pushed.

[WillinVT]

It would be funny to hear about some of these "junk debt" buyers who have to file for bankruptcy because they could never collect any of the debts they bought.

[catleg]

It would be funny to hear about some of these "junk debt" buyers who have to file for bankruptcy because they could never collect any of the debts they bought.

Oh it has definitely happened. Then disposing of their portfolio becomes a big problem, nobody can really tell which debts have had payments made or not. I forget the name but it's a big one in Buffalo, apparently that's a hub for collections companies.

[GoingDown]

I've heard that it's rather difficult to get junk debt buyers to buy up all this worthless charged off credit card debt because they are starting to realize that most people in this situation simply can not afford to pay back their debts PERIOD.

I noticed that three of my debts are still with the original creditors. They were unable to sell them off to junk debt buyers. And it has been years and years since I stopped paying them.