@Anonymous wrote:
Okay-
I've taken care of business with pretty much everything but a chargeoff that's been sold to a CA. It used to be a constantly zero-balance Visa with a 26k limit on it. And then the caca hit the fan, I had to pay mortgage with my Visa...yup. Charged off to the tune of 26k. (insert whistling sound effects here)
But now the bottom-feeder CA has bought it and "charged interest," raising it to 56k. A-holes! It's time to initiate a PFD. As a percentage, how much should I offer in the initial PFD letter?
Thx in advance!
Based on the latest SEC filings from the 4 debt collectors listed on the stock exchange(s), their cost of a new virgin recently charged off portfolio is 3.3% to 9% of face value, so adding in the basic cost of doing business you figure they have no more than 15% of face value invested in any primary portfolio. Portfolio's are graded as primary, secondary, third and then basically trash-zombie debt. The price gets cheaper each time its resold, as does the low hanging fruit probably or percentage of collection.
Good news is if this is virgin debt, just charged off there is a good chance you can settle quickly at maybe 25-35% of the original charged off amount. Forget the added interest and fees, they are going to have a very hard time justifying that in court based on the original credit agreement, complete media documentation, cost of the actual debt (unfair enrichment) and assignment clause. Bad news is that if you owe $26k even claimed as $52k, you have a VERY good chance of being sued by the debt collector and if you are its a whole different story.
Even if you want to offer 100% of the charge off, that's $26k not $52k, but I'd probably start at $8-$9k and go from there assuming you can pay that now. If you have to have a "payment schedule" getting a low-quick settlement is not going to be as easy or cheap. Don't forget to get a written agreement that the debt is PAID in FULL and also remember you'll probably end up with a 1099-C which means you'll owe taxes on the forgiven amount which at worst should be the $26k NOT the inflated $52k.
