Quote:
Originally Posted by PFUNK
This might be a stupid consideration but, have you ever though of lowering your settlement rate of the debt you are willing to take? Instead of 75%, just present it and sell them on the opportunity that you are doing them a HUGE favor that they cannot pass up, and wipe their debt at 50% or even 40% etc., thus potentially increasing your success rate.
You said it was a numbers game, which clearly it is so wondering if this is a negotiable point for you in the business.
So if you called me wanting 75% and I tried to negotiate to 40% would you even work with me?
That's not a stupid consideration at all. However, the way it's presented would be a problem. If you start at 50 percent, you can collect AT MOST 50 percent. You need to start asking for 100percent and claiming that they owe the whole amount, and you're doing them a favor by working with them and not reporting it to the credit bureau after all this time/pressing charges. Then if they seem like they really do want to get out of debt you get the 100% easily sometimes. If they want to get out of debt but are legitimately pressed for cash, this is when you set up an extended payment plan. However, like it has been mentioned in this thread, these people often don't manage finances well, so it is in your interest to get it all up front. You can offer to settle for 90 on the dollar TODAY, or work your way down to 75, if they can pay right now, since a bird in the hand is worth 2 in the bush and all. Also, capital available right now is worth more than it will be in 8 months, since you need to reinvest in more debt.
That being said, collecting on PayDayLoans, I would almost never settle for 50% because there is no risk of bankruptcy with such a small debt. I would always push for a bigger payment over a longer period with that type of debtor. If I felt 50% was all I could get I would take it, but I rarely would, and it would depend on how long I have had the file and how hard I worked it. I would never take it on the first call. After I had worked the file for 2/3 months and I was ready to buy a new portfolio, then I would take it just because something is better than nothing. With the collection software I have, I can put a note on somebodies file that they want to settle for 50 on the dollar or something like that, and refuse anything else. I won't see that file again until I am ready to sell the debt... then the software will pop it up for me and remind me to call these people back and take whatever I can get in the couple of days I have left with their file.
That being said, if I was collecting on larger debts, like credit card debts with 2-10k in debt, I would be much more likely to settle, since bankruptcy becomes a legit issue with larger debts. I would also be much more likely to settle for 50 percent or less if I was buying "junk debts," or debts that are 3 years old or so. These are sold at less than 1cent on the dollar a lot of times, so even settling for 50percent is a huge coup. Some agencies make a ton of money collecting on these junk debts. However, you need many more people working them than I have, because it is truly a huuuuge numbers game. For 10k you would own literally over 2mm in debt, and collecting 1percent would make a ton of cash. For those types of debt, I would try to get the whole amount, but would get into settlement talks on the first call, because people have already tried and failed to get cash from them... any amount you can get is a success.
I guess to answer your question directly, I would personally not work with you because the debt I will own is to small for that, but if you owed a significant amount of debt I would def work with you. Also, if the debt is older than 2 years, I would DEF settle with you for way less than what you owe. Any more specifics I'd be glad to answer as well, although I am very green to this type of thing as well.