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How much do debt buyers pay for debt?
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Short answer: Debt buyers usually pay a few cents per dollar of face value. The FTC's 2013 study of the largest buyers found an average of 4.0 cents, 7.9 cents for debt under three years old, 2.2 cents for debt aged 6 to 15 years, and almost nothing beyond 15 years. Fresh, well-documented and secured debt sells for more.
What is your portfolio worth?
Free, confidential valuation. Summary data only, mutual NDA before any documents, and no obligation to sell.
What did the FTC find?
The FTC's staff report The Structure and Practices of the Debt Buying Industry (January 2013) analyzed portfolios that the largest buyers purchased from 2006 to 2009 (FTC):
| Debt age | Average price per $1 |
|---|---|
| All ages | 4.0¢ |
| Under 3 years | 7.9¢ |
| 6–15 years | 2.2¢ |
| Over 15 years | About 0¢ |
The FTC did not publish a single figure for 3–6 years.
What do public company filings show?
- Encore Capital told the SEC in 2009 that it bought freshly charged-off credit card debt under a forward-flow contract at about 6% of face value, with market quotes of 6.5%–8% (SEC correspondence).
- Encore reported paying 2.2 cents per dollar on average for $12.7 billion of face value bought through 2003 (2004 investor presentation filed with the SEC).
Why do some debts sell for more?
- Age: newer debt is worth more.
- Prior placements: fresh debt outsells primary, secondary and tertiary placements.
- Documentation: statements, contracts and chain of title.
- Type: the FTC found medical and utility debt sold for less than credit card debt, and mortgage debt for more.
- Collateral: secured notes are priced on the collateral and yield.
How do you get a real price for your portfolio?
Benchmarks are only a starting point. Use the estimator for a range, check the full pricing guide, then get competing bids from licensed buyers. Competition is the best way to reach a market price.
What is your portfolio worth?
Free, confidential valuation. Summary data only, mutual NDA before any documents, and no obligation to sell.
What else do sellers ask?
How much do debt collectors pay for debt?
Debt buyers (some of which also collect) paid an average of 4.0 cents per dollar in the FTC's 2013 study. Debt under three years old averaged 7.9 cents.
How much does a debt buyer pay for a $10,000 debt?
Using the FTC averages only as an illustration: about $400 at 4.0 cents, or about $790 if the debt is under three years old. Actual offers depend on the portfolio.
How do debt buyers make money?
They buy at a deep discount and collect, or resell, for more than they paid. The FTC study and public filings describe this model.
Is the FTC data still current?
It is the most-cited public benchmark, but it covers 2006–2009 purchases. Today's prices may differ, so treat it as a reference point, not a quote.
Where should you go next?
General information only, not legal, tax or accounting advice. Price figures are historical public benchmarks, not offers. Verify with counsel.