Re: How can written-off debt still be collectible?!!
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Posted by scott (65.25.99.145) on June 24, 2003 at 18:26:39:
In Reply to: How can written-off debt still be collectible?!! posted by Armadillo on June 24, 2003 at 18:20:10:
Think of it this way. The OC must chargeoff in 6 months from date of last payment(the full minimum payment). Let us say you max out a $1000 card and do not pay. You will get hit with $30 each month for overlimit and $30 for missed payment. Now you owe $1300+ interest. Let us just add $100 so $1400 now and they charge off. Typically I have heard(and I am not 100% so bear with me) they get about 30% back in tax breaks so let us just even it out at $400. They started at $1000 and have essentially gotten 40% of it back now. Now they can either assign it to a CA who will probably take 1/3 off the top or sell it. IF they assign the debt and the CA gets the payment they got the entire $1300 back and made money. If they sell it most of the time it will go for around 70% of value as it is new debt. Any CA can jump in here but this is what I have seen on the CA boards. the OC will get pretty much their money back and then some. Also, some OCs like discover will just sue right away and with huge SOLs on judgements and liens and such they will make a ton of cash and so will their attorneys.
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