Seller questions about selling charged-off debt

Deciding to sell

Why do banks sell charged-off debt?

To recover cash from charged-off accounts, cut collection cost and free staff. Bank sales are subject to supervisory expectations such as OCC Bulletin 2014-37 on buyer due diligence and data accuracy. A sale also moves recovery risk to the buyer, so the bank stops working the accounts. See Bank and credit union portfolios.

Do banks sell debt to debt buyers?

Yes. Banks routinely sell charged-off consumer accounts to debt buyers, either in one-off portfolio sales or under forward-flow agreements. National banks are expected to follow OCC Bulletin 2014-37, which covers buyer due diligence, sale contracts, data accuracy and oversight after the sale. The FDIC has not issued similar debt-sale guidance; state-chartered banks follow the 2023 Interagency Guidance on Third-Party Relationships (FIL-29-2023) and should check with their examiner. See Bank and credit union portfolios.

Do credit unions sell charged-off loans?

Yes. NCUA's 1997 legal opinion says federal credit unions may sell charged-off loans under 12 U.S.C. §1757(4). State-chartered credit unions should check state rules. Credit unions typically sell the same way banks do: summary data, an NDA, a data tape, competing bids and a written purchase agreement. NCUA has said it does 'not have any guidelines that specifically address the sale of charged-off loans.' See Bank and credit union portfolios.

Why would a lender sell debt instead of collecting it in-house?

Selling turns charged-off balances into cash now and ends the cost of collecting them. In-house collection keeps the upside but requires staff, systems and ongoing compliance work under federal and state law. A sale transfers ownership and recovery risk to the buyer under the purchase agreement. See Sell, keep collecting or place on contingency.

Collection agency vs. debt buyer: which is better for a seller?

It depends on your recovery rates, costs and how old the accounts are. A collection agency usually works on contingency: you keep ownership and pay a share of what it collects. A debt buyer pays a lump sum up front and takes the recovery risk. OCC Bulletin 2014-37 asks banks to document a financial analysis showing why selling beats other options, such as collecting internally. Older accounts usually sell for less, so the timing of that decision matters. See Decide whether to sell.

What financial analysis should a bank do before selling debt?

OCC Bulletin 2014-37 says policies should require a financial analysis detailing why selling debt is more beneficial than other options, such as managing collection internally or employing debt collectors. It also asks banks to assess how debt sales fit their business strategy and risk profile. See Bank and credit union portfolios.

How many days delinquent before charge-off, and when should you sell?

Under the federal banking agencies' retail credit policy, closed-end retail loans are generally charged off at 120 days past due and open-end loans, such as credit cards, at 180 days (FFIEC retail credit policy (65 FR 36903)). Other lenders set their own policies. After charge-off, sooner is usually better: Jefferson Capital's 2025 annual report says newly charged-off portfolios sell for a higher share of face value than more seasoned ones. See Debt Pricing Guide.

How does debt selling work?

The seller shares summary data, signs a mutual NDA, then gives interested buyers a data tape and sample files. Buyers bid, the seller chooses one, and both sign a purchase agreement. The buyer pays, receives the account files and takes over ownership of the accounts. There is no standard timeline; clean, well-documented files close faster, and first-time sellers often take longer. See How a debt sale works, step by step.

What is a debt sale?

A debt sale is the transfer of ownership of receivables, usually charged-off accounts, from the creditor to a buyer for a lump-sum price. After closing, the buyer owns the accounts and keeps whatever it recovers, subject to the terms of the purchase agreement. See What a debt sale is.

What does selling bad debt mean?

It means a creditor transfers ownership of accounts it has written off to a debt buyer for cash, usually a fraction of face value. The creditor records the proceeds and stops collecting. The buyer takes on the recovery risk and must follow collection laws. See Selling bad debt explained.

Who can sell debt?

Any business that owns receivables outright can generally sell them, including banks, credit unions, auto lenders, fintech and BNPL lenders, medical providers, utilities, telecoms and other businesses. Check first that you have clear ownership records and that your loan agreements or program agreements do not restrict transfer. See Who we serve.

Who do banks sell debt to?

Banks sell charged-off accounts to debt buyers: companies that purchase receivables and then collect them, use collection firms, or resell them. OCC Bulletin 2014-37 expects banks to check each buyer's background, complaint history, financial condition, licensing and insurance before signing a contract. See For buyers.

Where can a lender sell debt?

Directly to debt buyers, through a loan sale advisor, or through a service for sellers like SellChargeOffs, which introduces you to buyers whose criteria fit your file; you then deal with each buyer directly. For charge-off portfolios, our service is free for sellers. We are paid by buyers through a per-introduction fee; sellers pay nothing. To request introductions you share summary figures only; account data moves only after a mutual NDA. See How it works.

Can I sell bad debt?

Yes. Creditors routinely sell charged-off accounts to debt buyers. Regulators expect sellers to give buyers accurate data, and some states require debt buyers to be licensed. Accounts with clear ownership records and complete documentation sell most easily and draw better prices. See Selling charge-offs.

Can you sell debt owed to you?

Generally yes, if you own the receivable outright and the underlying agreement does not restrict transfer. Buyers will ask for proof of the debt, such as the contract, statements and payment history, plus evidence of ownership. Consumer debts bring extra federal and state rules. See Debt types you can sell.

How do I sell a debt to a collection agency?

Most collection agencies do not buy accounts; they collect for a fee. To sell, you go to a debt buyer, and some debt buyers also run collection operations. A sale gives you cash now, ends your involvement and transfers ownership and recovery risk to the buyer. Compare that against what you would net by placing the accounts, after agency fees and the time value of money. See Sell or keep collecting.

Next step: estimate a price range, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

What is sellable

Can companies sell debt?

Yes. Most charged-off consumer and commercial receivables can be sold, including credit card and personal loans, auto deficiency balances, BNPL and fintech loans, medical receivables, utility and telecom accounts, private student loans, business invoices and court judgments. The seller must own the accounts and be able to prove it. Federal student loans cannot be sold to debt buyers. See All debt types.

Can a lender sell non-performing loans before charge-off?

Generally, yes. Some buyers purchase loans 90 or more days past due or on nonaccrual as whole loans before charge-off. These tend to be secured loans, such as mortgages and equipment loans, priced on the collateral and the workout; unsecured retail loans tend to be sold after charge-off. Check participation and servicing agreements first. See How to sell non-performing loans.

Which accounts should be excluded from a debt sale?

OCC Bulletin 2014-37 says debt that is settled or settling, owed by deceased account holders, subject to bankruptcy, in litigation with the bank, fraudulent, or lacking clear evidence of ownership is not appropriate for sale. It adds SCRA-eligible accounts, minors, disaster areas and accounts near the statute of limitations. See Accounts banks exclude.

Can accounts in bankruptcy, deceased, disputed or in litigation be sold?

Usually not. OCC Bulletin 2014-37 lists bankruptcy, deceased-holder and litigation accounts as clearly not appropriate for sale, and requires sellers to tell buyers about unresolved disputes and fraud claims. Most buyers ask for these accounts to be scrubbed out of the file before they bid. See Accounts to remove before selling.

Does the statute of limitations change when debt is sold?

Generally no. A sale does not restart the clock; the buyer steps into the seller's position, with the same deadline. Accounts close to or past the limit are risky, and many buyers will not take them. OCC Bulletin 2014-37 tells banks to refrain from selling accounts close to the statute of limitations. Under Regulation F (12 C.F.R. 1006.26(b)), debt collectors may not sue or threaten to sue on time-barred debt. See Accounts to remove before selling.

Can fraud or identity-theft accounts be sold?

No. OCC Bulletin 2014-37 lists debt incurred through fraudulent activity as not appropriate for sale. Under the FCRA, a person notified that a debt resulted from identity theft may not sell or transfer it for consideration (15 U.S.C. 1681m(f)). Scrub these accounts first. See Accounts to remove before selling.

Can settled or partially paid accounts be sold?

Settled accounts, and accounts in the process of settlement, should not be sold: OCC Bulletin 2014-37 lists them as clearly not appropriate. Accounts with partial payments but no settlement can be sold if the balance is accurate. The data tape should show the date and amount of the last payment. See Accounts banks exclude.

Why does debt keep getting sold?

Because each owner or agency that cannot collect may pass the accounts on. The industry describes this by placement: fresh debt has not been placed with an agency, primary has had one placement, secondary two, and tertiary three or more. Each extra placement usually lowers the price, because the easiest accounts to collect have already paid. See Selling charge-offs.

Who will buy my debt, and is there a minimum size?

Debt buyers: from large public companies to small firms that focus on one debt type, state or balance size. There is no industry-wide minimum. Buyers set their own thresholds based on account count, total face value and average balance, and some focus on large portfolios while others take smaller files. Share summary figures early so you learn which buyers fit your portfolio's size. See Request introductions.

Next step: estimate a price range for the accounts you can sell, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Regulation and compliance

Is it legal to sell debt?

Yes. Selling charged-off debt is legal in the United States, and creditors do it routinely. The sale must still comply with federal and state law, including privacy rules and, for banks, supervisory guidance such as OCC Bulletin 2014-37. Some states also require debt buyers to be licensed. See Is it legal to sell debt?.

Is it illegal for a bank to sell your debt?

No. Banks may lawfully sell charged-off consumer debt to debt buyers. National banks are expected to follow OCC Bulletin 2014-37, which says customers should receive timely notice that the debt was sold, the amount transferred, and the buyer's name and address. Selling bad data is risky, though: in July 2015 the CFPB, 47 states and D.C. ordered JPMorgan Chase to stop collecting on more than 528,000 accounts and to confirm debts before selling them (CFPB release). See When a bank sells debt.

Can a bank legally sell a customer's debt?

Yes. Debts are generally assignable, and banks sell charged-off accounts to debt buyers. OCC Bulletin 2014-37 sets the OCC's expectations for national banks, including written policies, buyer due diligence, accurate account data at the time of sale, and customer notice of the sale. See Can a bank legally sell debt.

Why is debt buying legal?

Because debts are generally assignable property, like other contract rights. The law regulates how purchased debt is collected rather than banning the sale: buyers that collect consumer debt are often covered by the FDCPA and Regulation F, depending on how they operate, and many states also require a collection license. See Why selling debt is legal.

What is OCC Bulletin 2014-37?

It is the OCC's 2014 risk management guidance on consumer debt sales by national banks and federal savings associations. OCC Bulletin 2014-37 covers internal policies, buyer due diligence, contract terms, accurate data at the time of sale, compliance with consumer protection laws, and oversight after the sale. See Bank and credit union portfolios.

What does the OCC expect banks to do before selling consumer debt?

Under OCC Bulletin 2014-37: adopt written debt-sale policies, complete a financial analysis, check each buyer's background, complaints, finances, licensing and insurance, set repurchase and litigation reserves, scrub account data for accuracy, and exclude accounts that are not appropriate for sale. See Bank and credit union portfolios.

Which accounts does the OCC say banks should not sell?

OCC Bulletin 2014-37 lists settled or settling debt, deceased account holders, bankruptcy, litigation with the bank, fraud, and accounts lacking clear evidence of ownership. Banks should also refrain from selling SCRA-eligible accounts, minors' accounts, accounts in disaster areas, and accounts close to the statute of limitations. See Accounts banks exclude.

Do debt buyers need a license?

Many states require debt buyer or collection agency licensing. Ask every buyer which licenses it holds for the states in your portfolio. OCC Bulletin 2014-37 also tells banks to confirm buyers are appropriately licensed and insured. We do not license or certify buyers. See FAQ and compliance.

Are debt buyers considered debt collectors under the FDCPA?

Often. A buyer is a debt collector if its principal purpose is collecting debts, or if it regularly collects debts owed to others. In Henson v. Santander (2017), the Supreme Court held that buying debt and collecting it for yourself does not meet the second test. See FAQ and compliance.

Are sold debts enforceable, and what does the seller still owe?

Yes, a sold debt stays enforceable if the buyer can prove it owns the account and the debt is within the statute of limitations. The seller is not off the hook entirely: you remain responsible for your conduct before the sale, along with any reps, warranties and repurchase duties in the agreement, and the buyer is responsible for its own conduct after. OCC Bulletin 2014-37 also expects banks to oversee debt-sale arrangements. See Who is responsible after a sale.

Does the TCPA apply to debt collectors after accounts are sold?

Yes. The TCPA applies to collection calls and texts made with an autodialer or prerecorded voice, whoever makes them. After a sale, the buyer is generally responsible for its own calls, and you remain responsible for calls made before the sale; the purchase agreement controls. Make sure it assigns compliance responsibility clearly, as OCC Bulletin 2014-37 asks banks to do. See TCPA compliance for debt collection.

Is selling medical debt legal?

Generally yes, subject to HIPAA, state law and, for nonprofit hospitals, IRS §501(r) rules on extraordinary collection actions. Several states have added limits on medical debt sales and reporting, so get legal review before a sale. See Selling medical debt.

Does selling medical debt violate HIPAA?

Not by itself. HIPAA permits disclosures for payment purposes, which covers collection and sale of receivables, but only the minimum necessary data should be shared, under a proper agreement. Confirm the structure with counsel before any patient-level data leaves your systems. See Selling medical debt.

Next step: estimate a price range, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Data and media files

Where do debt buyers get account information from?

From the seller. At first, buyers see only summary figures: debt type, account count, total face value, charge-off date range, state mix, and prior placement or sale history. After a mutual NDA, the seller provides a data tape with account-level fields and a sample of account documents. After closing, the buyer receives the full file. See FAQ and compliance.

What is a data tape in a debt sale?

A data tape is a spreadsheet with one row per account: balances, charge-off date, last payment date and amount, open date, state, and the itemized amounts owed. Buyers price the portfolio from it. Share it only after a mutual NDA, through a secure channel. See Data tape and media file.

How does a buyer prove it owns the debt?

With the bill of sale and the account documents, called media. OCC Bulletin 2014-37 lists the signed contract or other proof of liability, the last 12 statements (or all, if fewer), all account numbers used, an itemization of amounts owed, last payment details, and records of disputes and collection efforts. A buyer that cannot produce these may be unable to collect or sue. See Data tape and media file.

What if account documents are missing?

Fix the gaps or leave those accounts out. Buyers usually discount or exclude accounts they cannot document, and OCC Bulletin 2014-37 lists accounts lacking clear evidence of ownership as not appropriate for sale. Disclose known gaps up front rather than leaving them for buyers to find. See Preparing the file.

What is a debt NDA?

A non-disclosure agreement signed before any account data is shared in a debt sale. It limits who can see the data, what they may use it for, and requires return or destruction if no deal closes. Account-level data should go only to interested buyers who have signed. OCC Bulletin 2014-37 also asks banks to make sure every party has strong controls for sensitive customer information. See Mutual NDA.

Next step: estimate a price range from summary figures only, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Pricing

How much do debt buyers pay for debt?

Usually a small fraction of face value: 2025 average purchase prices at three large public debt buyers ran from about 6 cents (reported in Jefferson Capital’s 10-K, filed March 13, 2026) to about 14 cents (PRA Group, by our calculation from purchase and face-value figures in its 10-K, filed March 2, 2026) per dollar of face value. Actual offers depend on the portfolio, so compare competing bids. See How much debt buyers pay.

How much do banks sell debt for?

A small fraction of face value: 2025 average purchase prices at three large public debt buyers ran from about 6 cents (reported in Jefferson Capital’s 10-K, filed March 13, 2026) to about 14 cents (PRA Group, by our calculation from purchase and face-value figures in its 10-K, filed March 2, 2026) per dollar of face value. Bank portfolios vary, so compare competing bids. See Debt Pricing Guide.

How much does bad debt sell for?

Usually a small fraction of face value: 2025 average purchase prices at three large public debt buyers ran from about 6 cents (reported in Jefferson Capital’s 10-K, filed March 13, 2026) to about 14 cents (PRA Group, by our calculation from purchase and face-value figures in its 10-K, filed March 2, 2026) per dollar of face value. Treat that as a reference point, not a quote. See Debt Pricing Guide.

How much do credit card companies sell bad debt for?

A small fraction of face value: 2025 average purchase prices at three large public buyers of defaulted consumer receivables ran from about 6 cents (reported in Jefferson Capital’s 10-K, filed March 13, 2026) to about 14 cents (PRA Group, by our calculation from purchase and face-value figures in its 10-K, filed March 2, 2026) per dollar of face value. See Selling charge-offs.

How much do hospitals sell medical debt for?

We know of no current public benchmark for medical debt prices, so we don’t quote one. See Selling medical debt.

How much does a debt portfolio cost?

A portfolio is priced as a percentage of face value; 2025 average purchase prices at three large public debt buyers ran from about 6 cents (reported in Jefferson Capital’s 10-K, filed March 13, 2026) to about 14 cents (PRA Group, by our calculation from purchase and face-value figures in its 10-K, filed March 2, 2026) per dollar of face value. Real prices vary by age, type and documentation. See Debt Pricing Guide.

What is the market value of a debt portfolio?

Whatever buyers will pay for it in competing bids, stated as cents per dollar of face value. Age since charge-off matters most, followed by debt type, prior agency placements, documentation quality, average balance, state mix, payment history and portfolio size. Clean files with signed contracts and full statements draw higher bids; missing media and many prior placements lower them. See What moves the price.

How is a charged-off debt portfolio valued?

Buyers model expected collections from the data tape, using account age, balances, payment history and state mix, then subtract collection costs and their target return. Public benchmarks, such as the average purchase prices in debt buyers’ 2025 annual reports, give a starting range. Competing bids show the market price. See Price estimator.

How do debt buyers make money?

They buy at a deep discount and collect more than they paid. Public company filings describe this model: Encore Capital’s 2025 annual report says it purchases defaulted consumer receivables at deep discounts to face value. Their margin depends on collection rates and costs, which is why they pay more for fresher, well-documented accounts. See How debt buyers make money.

How much debt did debt buyers purchase last year?

There is no reliable public figure for total annual purchases. In their 2025 annual reports, Jefferson Capital, Encore Capital and PRA Group together reported buying portfolios with about $33.4 billion of face value for about $3.4 billion, across all the countries where they buy. See How much debt buyers pay.

Next step: estimate a price range, then Request introductions for a range based on your portfolio. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Finding and choosing buyers

Who buys charged-off debt?

Debt buyers: companies that purchase charged-off receivables, then collect them in-house, use outside collection firms or law firms, or resell them. Buyers range from large public companies to small specialists in one debt type or region. Many states require them to hold a license. See For buyers.

What is a debt buyer?

A debt buyer is a company that purchases receivables, usually charged-off accounts, from the original creditor or another owner for a fraction of face value. It then owns the accounts and collects them or resells them, subject to federal and state collection and licensing laws. See What is a debt buyer.

What do debt buyers do?

They review portfolios, bid on them, and after closing collect the accounts themselves, through collection firms or law firms, or resell them. Buyers that collect consumer debt are often covered by the FDCPA and Regulation F, depending on how they operate, and many states also require a collection license. See What debt buyers do.

How do you verify a debt buyer or collection agency?

Check its licenses in your portfolio's states on the state regulator's site, and ask for audited financials, proof of insurance, complaint history and references from other sellers. You can also search the CFPB complaint database. OCC Bulletin 2014-37 expects banks to check each buyer's background, experience, past performance and compliance record. Inviting several buyers to bid helps you compare them. See Choosing a debt buyer.

What due diligence should a seller do on a debt buyer?

Under OCC Bulletin 2014-37: review the buyer's background, experience and past performance, its consumer complaints and how it resolves them, audited financial statements, licensing and insurance, and its consumer-law compliance record. Repeat the review periodically while a forward-flow arrangement is in place. See Debt buyer due diligence checklist.

What is RMAI certification and does it matter?

The Receivables Management Association International runs a certification program for debt buyers and other receivables businesses that sets industry standards. It is voluntary and not a government license, so treat it as one useful signal, alongside state licenses and your own review. See FAQ and compliance.

What should a seller ask a debt buyer?

Ask for proof of state licenses, the financial capacity to close, how the accounts will be collected (in-house, agencies or law firms), its data security controls, whether it resells accounts, and whether it will sign your NDA and purchase agreement. Ask for bids that state the price and every condition. See What sellers expect from buyers.

Next step: Request introductions; buyers see account data only after a mutual NDA. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

NDA, RFP and bids

Why sign an NDA before a debt sale?

An NDA protects your account data and deal terms before buyers see anything beyond summary figures. It limits how buyers may use and share the information and requires them to return or destroy it if no deal closes. Sign it before any sample file or data tape moves. See Mutual NDA.

What is a debt sale RFP?

A request for proposal invites interested buyers to bid on a portfolio under set rules: the data provided, the bid deadline, the bid format, key contract terms and closing timeline. It makes bids easier to compare and documents a fair, consistent process for auditors and regulators. See The steps in a debt portfolio sale.

How does the bid process work in a debt sale?

After the NDA, buyers review the data tape and sample files, then submit bids as a percentage of face value or a dollar price, often with conditions. The seller compares price, terms and the buyer's profile, chooses a winner, and moves to the purchase agreement. There is no fixed number of bidders: invite enough for real competition, but only buyers that fit, because every extra recipient of your data adds security risk. See How bids work in a portfolio sale.

What is a debt portfolio auction?

A competitive sale where several interested buyers bid on the same portfolio by a deadline, sometimes with a second round for the top bidders. Running several buyers against each other usually improves price, though the seller should weigh contract terms and buyer quality as well as price. See How debt portfolio auctions work.

Next step: Request introductions; buyers see account data only after a mutual NDA. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Due diligence

What happens in buyer due diligence on a debt portfolio?

The buyer checks that the data tape matches the underlying documents, reviews sample media, checks balances, dates and state mix, and looks for bankruptcies, deceased accounts and disputes. Findings can change the bid or lead to accounts being removed before closing. See Buyer due diligence step.

What is a media sample in due diligence?

A set of account documents, such as contracts and statements, for a selection of accounts, provided so the buyer can confirm that the data tape is accurate and that documentation exists. Strong samples support a firmer bid. Share samples only after the NDA is signed. See Media checklist.

What internal due diligence should a seller do before a sale?

Confirm ownership, scrub out excluded accounts, reconcile balances, and check that documents exist for each account. OCC Bulletin 2014-37 describes quality control before each sale, including data scrubs and transaction sampling, so account data is complete and accurate before transfer. See Accounts to remove first.

Next step: Request introductions once your file is scrubbed. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Purchase agreement, reps and putbacks

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. OCC Bulletin 2014-37 expects these responsibilities to be clearly set out. See Debt sale agreement guide.

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. See Debt purchase agreements explained.

What should a debt purchase agreement include?

The account schedule, price and funding, cutoff date, representations and warranties, repurchase terms, document delivery, data security and return or destruction of data, resale limits, complaint handling, and who is responsible for consumer-law compliance. OCC Bulletin 2014-37 covers many of these terms. See Main clauses of a debt sale agreement.

What representations and warranties does a debt seller make?

Typically that the seller owns the accounts, balances are accurate, the debts were validly created, and accounts were not settled, discharged in bankruptcy or owed by deceased borrowers, unless disclosed. The exact list is negotiated, and it often expires after a set period. See Seller reps and warranties.

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 requires, whatever warranties the contract contains. See As-is sales and warranties.

What is a putback or buyback in a debt sale?

A contract right letting the buyer return an account that breaches the seller's warranties, such as one found to be in bankruptcy, deceased, settled or fraudulent, in exchange for a refund. OCC Bulletin 2014-37 asks banks to track repurchase requests to improve their review before each sale. See How putbacks work.

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, so repurchase exposure ends on a known date. See Putback windows.

How is the repurchase price calculated?

The purchase agreement sets the formula. A common approach refunds the price paid for that account, which is its face value at sale times the purchase percentage, sometimes adjusted for amounts the buyer has already collected. Agree the formula before signing. See Repurchase price formulas.

What is a loan sale agreement?

A contract for selling loans, performing or not, from one owner to another. For charged-off consumer accounts, it works like a debt sale agreement: account schedule, price, cutoff date, warranties, repurchase rights and transfer of documents. Mortgage and note sales carry extra collateral terms. See Debt and loan sale agreements.

Next step: Request introductions before you negotiate terms. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Chain of title

What is chain of title in a debt sale?

The documented sequence of ownership transfers from the original creditor to the current owner, usually bills of sale and assignments with account schedules. Buyers need a complete chain of title to prove ownership. OCC Bulletin 2014-37 lists accounts lacking clear evidence of ownership as not appropriate for sale. See Chain of title.

What is a bill of sale for debt?

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. Buyers rely on it, along with account records, to show they own each debt. See Bill of sale and chain of title.

What happens if the chain of title is broken?

The current owner may struggle to prove it owns the debt, which can undermine collection and lawsuits. OCC Bulletin 2014-37 warns that each resale raises the risk that key information is lost, calling ownership into question. Buyers may return such accounts under the agreement. See Why chain of title matters.

What is a debt buyer affidavit, and does the seller provide one?

A sworn statement about the accounts, such as the balance and the chain of ownership, used in disputes or lawsuits. Buyers may need seller records or affidavits from the original creditor. Agree in the contract which documents and affidavits you will provide, for how long, and whether there is a charge. See Documents after closing.

Next step: Request introductions once your ownership records are ready. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Closing and funding

What is a cutoff date in a debt sale?

The date used to fix the account balances and the list of accounts included in the sale. Balances on the schedule are stated as of the cutoff, and the agreement sets who keeps payments that arrive after it. It usually falls shortly before closing. Typically, payments on sold accounts that arrive after the cutoff belong to the buyer, and the seller forwards them within a set period. See Cutoff date and other clauses.

How and when does the seller get paid?

Usually by wire transfer at closing, when the bill of sale is signed, under the terms of the purchase agreement. Forward-flow sales are paid for each tranche as it transfers. Check that the contract sets the funding date and what happens if funds arrive late. See How it works.

How much does it cost to sell a debt?

Costs depend on the route. Marketplaces, auctions and advisors set their own fees, paid by the seller, the buyer or both. For charge-off portfolios, our service is free for sellers. We are paid by buyers through a per-introduction fee; sellers pay nothing. There is no obligation, and you can walk away any time before you sign a sale agreement. You may still have your own costs, such as legal review and preparing the data. See FAQ and compliance.

Next step: Request introductions.

Back to stages

Post-sale servicing and notices

What happens to accounts after they are sold?

Ownership transfers to the buyer under the purchase agreement, subject to any repurchase terms in the agreement. The buyer then decides how the accounts are handled, and you stop recovering on them. You update your records and credit reporting to show the sale. See Debt types you can sell.

How do borrowers know their debt has been sold?

From notices. Many sellers send a notice, and state rules vary. OCC Bulletin 2014-37 expects banks to give customers timely notice of the sale, the amount transferred and the buyer's name and address. A buyer that collects must send its own validation information under Regulation F. See Notifying borrowers.

How does sold debt show on a credit report?

OCC Bulletin 2014-37 says credit reporting should be up to date and accurately reflect the sale or transfer of the debt to the buyer. Furnishers must report accurately under the FCRA (15 U.S.C. 1681s-2). Confirm the exact codes with your reporting vendor. See Furnisher disputes.

Can you dispute a debt that was sold, and who handles it?

Yes, borrowers can dispute sold debt. Generally the buyer handles disputes about its own collection and reporting, while you still respond to disputes about how you reported the account before the sale. The purchase agreement should say how disputes and document requests are passed between you, and how fast. See Disputes after you sell a portfolio.

What oversight does a seller keep after the sale?

OCC Bulletin 2014-37 expects banks to oversee debt-sale arrangements: monitoring complaints and repurchases, keeping management reports on sales, prices and losses, and reserving the right to end relationships. Under forward flow, banks should repeat buyer due diligence periodically. See Bank and credit union portfolios.

How do you board files and transfer servicing to the buyer?

After funding, the seller sends the final account file and documents through a secure channel, in the format the agreement sets. The buyer loads, or boards, them onto its systems. Agree the file layout, delivery dates and any later document requests in advance. See After closing.

Next step: read what to do after closing, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Accounting and tax

What is the journal entry for selling charged-off receivables?

For a bank, the loan was already removed when it was charged off against the allowance. When the accounts sell, the bank debits cash and credits the allowance for credit losses as a recovery, as the OCC's Bank Accounting Advisory Series describes. See Charge-off accounting for worked entries.

How do you write off bad debt and book a later sale?

Write off the uncollectible balance against the allowance (or as bad debt expense, for companies that use the direct method). If you later sell the written-off accounts, banks generally credit the cash to the allowance as a recovery. See Charge-off accounting.

How do charge-offs affect taxes for the lender?

Generally, a business can deduct wholly or partially worthless debts under 26 U.S.C. 166. Sale proceeds on accounts already deducted are usually taxable income when received. Tax treatment depends on your entity and method, so check with your tax adviser. See Charge-off accounting.

Who files Form 1099-C after charged-off debt is sold?

Only the creditor that cancels the debt. Under the IRS Form 1099-C instructions, a listed entity files for a debt owed to it of $600 or more when an identifiable event occurs, and a sale is not one of those events. See Charge-off accounting.

Does a charge-off trigger a 1099-C?

Not by itself. A charge-off is an accounting entry; under the IRS Form 1099-C instructions, filing follows an identifiable event, such as a bankruptcy discharge or a defined policy to stop collecting and cancel the debt. See Charge-off accounting.

Should a seller file a 1099-C before selling an account?

Only if an identifiable event already occurred while you owned the debt; a sale is not one of the events in the IRS Form 1099-C instructions. Confirm with your tax adviser. See Charge-off accounting.

Where does a charge-off go on the call report?

Charge-offs appear in column A of Schedule RI-B, Part I, by loan type. Debt sale proceeds are recoveries, so they appear in column B of the same schedule and flow into the allowance roll-forward in Part II. See Charge-off accounting.

How does CECL treat expected recoveries?

Under ASC 326-20-30-1, expected recoveries of amounts previously written off and expected to be written off are included in the allowance, but cannot exceed those amounts. If you expect to sell charged-off accounts, the expected proceeds can count as recoveries, so document how you estimate them. See Charge-off accounting.

Next step: read charge-off accounting, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Forward flow

What is a forward flow agreement?

A contract to sell newly charged-off accounts to one buyer every month or quarter at pre-agreed pricing over a set period. High-volume sellers such as banks, telecoms and BNPL lenders use forward flow to get predictable recoveries without running a new sale each time. See Forward flow agreements.

What does a forward flow agreement look like?

It sets a price per dollar of face value for accounts delivered over a set term, with volume limits, delivery dates and data standards. Pricing usually stays fixed for the term unless the contract allows re-pricing or termination. OCC Bulletin 2014-37 expects banks to set clear contract terms, monitor repurchase requests, review buyers periodically under forward flow, and keep the right to terminate. See How forward flow is priced.

How does a forward flow agreement work?

The seller and buyer sign one master agreement setting price, term, account criteria and volume. Each month or quarter, newly charged-off accounts that meet the criteria transfer in a tranche with its own bill of sale and funding. OCC Bulletin 2014-37 expects periodic buyer reviews. See How forward flow works, step by step.

What does forward flow mean in banking and lending?

Forward flow means selling assets on a recurring schedule under one agreement. For charged-off debt, a buyer purchases new charge-offs each month or quarter. In fintech lending, the term, including forward flow financing, usually means an investor buying a lender's newly originated loans the same way, which is a different transaction. See Forward flow vs. forward flow financing.

What is a forward flow purchase agreement?

A contract under which a buyer purchases your newly charged-off accounts on a recurring schedule, often monthly, so you do not run a new sale each time. Prices are agreed in advance and the agreement often includes a term, volume limits and termination rights. Some lenders sell their older backlog in one sale first, then move new charge-offs to forward flow, which also lets them test the buyer. See Selling new charge-offs every month.

What is a forward flow agreement and chain of assignment?

The forward flow agreement is the master contract for recurring sales; the chain of assignment is the series of bills of sale and assignments showing each tranche's ownership transfer. Together they document how a debt moved from the creditor to the buyer. See Forward flow agreement terms.

Next step: read forward flow agreements, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

Resale restrictions

How many times can debt be sold?

There is no federal limit on how many times debt can be resold, but sellers can restrict resale by contract. OCC Bulletin 2014-37 warns that each resale raises the risk that information is lost and wrong amounts or wrong people are pursued. See Limiting resale.

Can a seller restrict a buyer from reselling the accounts?

Yes, by contract. OCC Bulletin 2014-37 says banks should address whether resales are permitted and, if so, require the first buyer to check the next purchaser and pass on all account information and documents. Some sellers ban resale outright or require consent. See Resale limits in the agreement.

Will a debt buyer sue, and can the seller limit lawsuits?

Some buyers sue on accounts they buy, and the seller can limit that in the contract. OCC Bulletin 2014-37 says bank 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. See Compliance terms that protect the seller.

Next step: read the debt sale agreement guide, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages

By debt type

Can medical debt be sold?

Generally yes, subject to HIPAA, state law and, for nonprofit hospitals, IRS §501(r) rules on extraordinary collection actions. Several states have added limits on medical debt sales and reporting, so get legal review before a sale and confirm financial assistance screening is complete. See Selling medical debt.

Can a deficiency balance be charged off and sold?

Yes, as unsecured charged-off debt, if the repossession and sale notices complied with state UCC Article 9 rules. Buyers want the retail installment contract, the notices, the auction or sale record and the deficiency calculation. Missing notices usually lead to discounts or exclusions. See Auto and BHPH.

When does Affirm charge off accounts, and can BNPL loans be sold?

Affirm's 10-K says it charges off loans at 120 days past due (Affirm 10-K, fiscal 2026). Other lenders set their own policies. Once charged off, BNPL and fintech loans can be sold to debt buyers, in one-off sales or forward flow. Buyers want e-sign audit trails, the terms each borrower accepted, payment histories, charge-off dates and state of residence. See BNPL and fintech portfolios.

How does the bank partner model affect selling charged-off loans?

In a bank partner model, a bank makes the loans and a fintech or investor buys them or a share of them. Whether the fintech can sell charged-off loans depends on the program agreements; the receivable owner and the bank may both need to approve. Buyers will review the structure, so have the transfer terms and the chain of title from the bank to you ready. See BNPL and fintech portfolios.

Can utility bills go to collections or be sold?

Yes. High-volume billers such as telecoms and utilities often sell final-bill balances, frequently through forward flow. Buyers want final-bill amounts, service start and end dates, the service address state, payment history and any deposit applied. Final-bill balances tend to be small, so sellers often sell in large batches. See Utility and telecom.

Can federal student loans be sold to a debt buyer?

No. Federal student loans (Direct Loans, FFEL and Perkins) are not sold to debt buyers. When they default, the Department of Education or a guaranty agency collects them, and federal law sets no statute of limitations on collecting them (20 U.S.C. §1091a). See Student loans.

Will payday loans go to collections or be sold?

Yes, but buyers screen hard for state licensing and rate-cap compliance and may exclude states where loans could be unenforceable. Have lender licenses for each state at origination, rate and fee disclosures, ACH authorizations, payment histories and complaint records ready before going to market. See Payday loans.

Next step: find your debt type, then Request introductions. We are paid by buyers through a per-introduction fee; sellers pay nothing.

Back to stages