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Debt sale agreement: what US sellers should know about reps, putbacks and chain of title
Not legal advice. General information for US creditors selling charged-off accounts, current as of October 19, 2026. A debt sale agreement is a negotiated contract; have your own counsel draft or review it.
Short answer: A debt sale agreement, also called a debt purchase agreement, is the contract that transfers charged-off accounts from seller to buyer. It fixes the account schedule and price, sets the seller's representations and warranties, gives the buyer a limited putback right, documents chain of title through a bill of sale, and controls resale and data security.
Key takeaways
- The agreement controls your risk after closing: what you promise about the accounts, for how long, and what you owe if a promise is wrong.
- Putbacks (buybacks) let the buyer return accounts that breach the warranties, such as bankrupt, deceased, settled or fraud accounts, for a refund set by formula.
- The bill of sale and assignment, with its account schedule, is the key link in the chain of title the buyer needs to prove ownership.
- Sellers can limit resale by contract. The OCC tells banks to decide whether resale is allowed and, if so, to require the first buyer to check the next purchaser and pass on all documents (OCC Bulletin 2014-37).
- Data security, return or destruction of data, and who is responsible for consumer-law compliance should be written out clearly.
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Preparing to negotiate a sale agreement?
Confidential introductions to debt buyers, free for sellers of charge-off portfolios. Summary business data only, and a mutual NDA before any documents. No obligation. We are paid by buyers through a per-introduction fee; sellers pay nothing.
What is a debt sale agreement?
A debt sale agreement is the contract under which a creditor sells receivables, usually charged-off accounts, to a buyer for a lump-sum price. Buyers often call the same document a debt purchase agreement; for loans it may be a loan sale agreement. The names differ, the job is the same: move ownership of a defined list of accounts on defined terms.
Buyers frequently bring their own form. That is fine as a starting point, but the terms are negotiable and the form is written to protect the buyer. For banks, the OCC expects debt-sale contracts to use clear, consistent terms and to spell out each party's duties, including confidentiality, information security and compliance with consumer protection laws (OCC Bulletin 2014-37). See debt sales for banks and credit unions.
What are the main parts of a debt sale agreement?
| Clause | What it does | Seller watch-point |
|---|---|---|
| Account schedule | Lists every account sold with balances as of the cutoff date | Reconcile it to your system before signing |
| Purchase price | Usually a percentage of face value, applied to the schedule | Confirm how removed or returned accounts change the price |
| Cutoff date | Fixes balances and who keeps payments that arrive later | Set a deadline for forwarding post-cutoff payments |
| Closing and funding | Sets when the buyer pays and when files transfer | Funds by wire at closing, before files move |
| Representations and warranties | Your promises about the accounts | Keep them accurate, limited and time-bound |
| Repurchase (putback) | Buyer's right to return accounts that breach a warranty | A clear list of triggers, a deadline and a refund formula |
| Bill of sale and assignment | Transfers title to the listed accounts | Attach the final schedule; keep a signed copy |
| Document (media) requests | What records you supply after closing | Limit how long, how fast and at what cost |
| Data security | How account data is protected, used, returned or destroyed | Written controls and a return or destruction plan |
| Resale limits | Whether the buyer may resell, and on what conditions | Ban, consent, or conditions that pass documents along |
| Compliance and collection conduct | Who is responsible for what after the sale | Licensing, litigation limits, complaint handling |
| Indemnification | Who pays if the other side's breach causes a loss | Mutual, capped where possible |
Which representations and warranties does a seller make?
Typical seller representations and warranties say that you own the accounts and can sell them, the balances are accurate, the debts were validly created, and, unless disclosed, the accounts were not settled, paid, discharged in bankruptcy or owed by deceased borrowers. The exact list is negotiated, and it often expires after a set period.
Some portfolios sell as-is, with minimal promises, usually at a lower price because the buyer takes more risk. Even then, banks should give buyers accurate and complete information at the time of sale, as the OCC expects, whatever warranties the contract contains (OCC Bulletin 2014-37).
The safest warranties are the ones your data can back up. Scrub the file before you sign; see the data-file checklist.
How do putbacks (buybacks) work?
A putback, or buyback, is a contract right that lets the buyer return an account that breaches your warranties, in exchange for a refund. Common triggers are accounts later found to be in bankruptcy, deceased, already settled or paid, fraudulent, outside the agreed criteria, or missing the documents you promised.
- Window: there is no standard length. The agreement sets how long the buyer has to return accounts. Negotiate a clear deadline and notice process so repurchase exposure ends on a known date.
- Refund formula: a common approach refunds the price paid for that account (its face value at sale times the purchase percentage), sometimes adjusted for amounts the buyer has already collected. Agree the formula before signing.
- Replacement: some agreements let the seller substitute an eligible account instead of refunding.
The OCC asks banks to monitor and analyze repurchase requests so they can improve their account review before the next sale (OCC Bulletin 2014-37). Frequent putbacks are a sign the scrub needs work.
Preparing to negotiate a sale agreement?
Confidential introductions to debt buyers, free for sellers of charge-off portfolios. Summary business data only, and a mutual NDA before any documents. No obligation. We are paid by buyers through a per-introduction fee; sellers pay nothing.
What is chain of title, and why does it matter?
Chain of title is the documented sequence of ownership transfers from the original creditor to the current owner, usually bills of sale and assignments with account schedules. A buyer that collects or sues needs to prove it owns each debt, so it will ask for your bill of sale and, if you bought the accounts yourself, the earlier assignments too.
The OCC lists accounts lacking clear evidence of ownership as not appropriate for sale, and warns that each time account information changes hands, the risk rises that key information is lost or corrupted, calling ownership into question (OCC Bulletin 2014-37).
In practice: sign one bill of sale per closing (or per tranche under forward flow), attach the final account schedule, and agree in the contract which documents and affidavits you will provide after closing, for how long, and whether there is a charge.
Can a seller limit resale of the accounts?
Yes, by contract. Federal law doesn't set a cap on how many times a debt can be resold; your contract can. The sale agreement can ban resale, require your consent, or allow it only on conditions.
The OCC says banks should address whether resales are permitted and, if they are, require the initial buyer to do thorough due diligence on the next purchaser and pass on all account information and documents (OCC Bulletin 2014-37). It also warns that resales raise the risk of pursuing the wrong person, the wrong amount, or both.
What compliance terms protect the seller?
- Compliance responsibility: generally, the buyer is responsible for its own collection and reporting conduct after the sale, and you remain responsible for conduct before it. Write that split into the agreement.
- Licensing: many states require debt buyers or collectors to be licensed. Have the buyer represent that it holds the licenses for the states in the file.
- Collection conduct: for banks, the OCC says contracts should address the volume of accounts the buyer may litigate and why, set minimum service levels, and avoid compensation terms that reward aggressive or improper collection (OCC Bulletin 2014-37).
- Data security: confidentiality, information security and a plan to return or destroy customer data. Lenders also have privacy and safeguarding duties under the Gramm-Leach-Bliley Act (15 U.S.C. § 6801).
- Identity theft: a person notified under 15 U.S.C. § 1681c-2 that a debt resulted from identity theft may not sell it, transfer it for consideration or place it for collection, with narrow exceptions such as a repurchase the buyer requires (15 U.S.C. § 1681m(f)). Keep those accounts out and warrant that you have.
- Resale of paid or discharged debt: Regulation F bars a debt collector from selling, transferring for consideration or placing for collection a debt it knows or should know was paid, settled or discharged in bankruptcy, with limited exceptions (12 C.F.R. § 1006.30(b)). Whether that rule reaches a given party depends on whether it is a debt collector under the FDCPA, so ask counsel; many sellers build the same exclusion into the resale clause either way.
What happens after signing?
At closing the buyer pays, usually by wire, and you sign the bill of sale. Then:
- Forward payments received after the cutoff to the buyer within the agreed period, and reconcile returned payments.
- Update credit reporting to show the accounts as sold or transferred. Furnishers have accuracy duties (12 C.F.R. § 1022.42); (15 U.S.C. § 1681s-2).
- For banks, the OCC expects timely notice to customers of the sale, the amount transferred and the buyer's name and address (OCC Bulletin 2014-37). Other sellers should check state rules.
- Answer media requests and putback claims under the contract's deadlines.
Checklist before you sign a debt sale agreement
- The account schedule reconciles to your records as of the cutoff date.
- Excluded accounts (bankruptcy, deceased, settled, fraud, disputed, near the statute of limitations) are removed or disclosed.
- Warranties match what your data can prove, with a survival period.
- Putback triggers, window and refund formula are written out.
- Resale is banned, consent-based, or conditioned on passing documents along.
- Data security, return or destruction of data, and compliance duties are assigned.
- Funding happens at closing, before any files transfer.
- Your own counsel has reviewed the final draft.
Many credit card and consumer charge-off sales use a buyer's form, so mark it up early. Ready to sell charged-off debt? Request introductions from summary figures.
Debt sale agreement FAQ
What is a debt sale agreement?
The contract that transfers ownership of the accounts from seller to buyer. It sets the price, cutoff date, closing and funding, the seller's representations and warranties, repurchase rights, data security, resale limits and each party's compliance duties.
What is a debt purchase agreement?
Another name for the debt sale agreement, viewed from the buyer's side. It lists the accounts sold, the purchase price as a percentage of face value, the seller's promises about the accounts, and remedies such as repurchase if those promises prove untrue.
Can a seller sell debt as-is without warranties?
Yes. Some portfolios sell as-is with minimal promises, usually at a lower price because the buyer takes more risk. Banks should still give buyers accurate information at the time of sale, as OCC Bulletin 2014-37 expects.
How long is a typical buyback window?
There is no standard length. The purchase agreement sets how long the buyer has to return accounts, and the window varies by deal and debt type. Negotiate a clear deadline and notice process.
What is a bill of sale and assignment for charged-off accounts?
The signed closing document that transfers ownership of the listed accounts from seller to buyer, usually with an account schedule attached. It is the key link in the chain of title.
Is there a standard debt purchase agreement template?
No single standard exists. Buyers and sellers often start from their own forms. A template is only a starting point; have your counsel adapt it to your accounts, data and state mix.
Does SellChargeOffs charge sellers for help with a sale?
No. We are paid by buyers through a per-introduction fee; sellers pay nothing. You sign the sale agreement directly with the buyer you choose.
Where should you go next?
- How a debt portfolio sale works, with a data-file checklist
- Forward flow agreements for recurring sales
- Is it legal to sell debt?
- How small lenders sell charged-off accounts
- The mutual NDA we use before any data moves
- Request introductions
General information only, not legal advice. SellChargeOffs only introduces sellers to buyers, is not a debt buyer or a broker, is not a collector, and is not a party to your sale agreement. We are paid by buyers through a per-introduction fee; sellers pay nothing.