Selling On A Debt.....

[Karma Supra]

Just wondering folks.. I have a CCj against someone, and he owes me money (not a mega amount, but enough to make a difference to me while I am out of work!). I have had the bailifs over once but to no outcome..

I have heard of companies that buy CCj's fora certain percentage of their value, so you get the money up front, (but not all of it) and it is them their problem to extract the money by whatever means they can find, and they keep the rest....

Does anyone know how this works??? Is it worth doing on a small sum? (under £3k)

Any other info??

Cheers!!!

[Matthew_McNally]

this is called debt factoring - and many places will do it - even big banks.

the link below is to the Federation of Small Businesses page on this

linkage

whether its worth doing is your judgment call.

You need to weigh the "get your money quick" element against the "not getting all the money, because the factoring company take a percentage" element, and draw your own conclusion I'm afraid mate

[LORD_ED]

but if u do do it think of the satisfaction of the ppl hell be getting round to collect the money

[daktari]

If i read that right the companies/people who take on the 'factoring' will get you UPTO 90% of the debt. If it were a flat 10% fee that`s not too bad. It`s the upto bit that would concern me. I suppose you can shop around as it were, to find a competetive one. But i would be inclined, if it were me, to do this only if all other avenues have been explored and failed. Getting any money back off debtors is a bonus. IMO

[Matthew_McNally]

If i read that right the companies/people who take on the 'factoring' will get you UPTO 90% of the debt. If it were a flat 10% fee that`s not too bad. It`s the upto bit that would concern me. I suppose you can shop around as it were, to find a competetive one. But i would be inclined, if it were me, to do this only if all other avenues have been explored and failed. Getting any money back off debtors is a bonus. IMO 

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The piece I linked actually says

Factoring will improve your cash flow by providing up to 90% of the value of your unpaid invoices within 24 hours of your raising them (less a small service fee). We'll pay you the remaining balance once your customer has paid.

So - thats 90% of the debt (less a small fee) - within 24 hours.

Thats pretty much all you money immediately.

The remaining balance (ie - the other 10%) is paid to you once the debt is recovered.

I linked to the FSB page, as they are a reputable, established organisation - who could not be mistaken for "da boys wiv baseball bats". :D

I am certain that should Karma decide to do this, he will do his own research and find a place that offers the best deal to him.

[daktari]

Ah, I see. Read it too quick as usual. :D Mind you, chaps with bats have their uses. That Triscothick`s a useful character.

[Karma Supra]

Cheers for the link, very interesting reading... I was really not expecting anything like 90% (I appretiate it says up to, and not including a "small" charge)

I would be happy with anything over 50%

Looking at that site it apears to be for small businesses.. Does anyone know if debt factoring is avaliable to individuals??

[daktari]

Don`t see why not. Business owners are individuals after all.

[Caz SR]

Don`t see why not. Business owners are individuals after all. 

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Maybe, but I wouldn't be surprised if you have to operate under a company name to sell on a debt to stop silly claims arising. A registered name (whether it's actually a business or not) purports structure and should be able to provide appropriate evidence and documentation regarding the debt.

As factors (the people buying the debt) are essentially giving credit on the basis of a loan, they will probably need to check accounts/books and your evidence. It may not be as straight forward as you think and could be a lengthy process if you're not selling this as a company debt.

As Charlie says he has issued a County Court Judgement against this person, it may have already been done though a company name (?).

Business Link - some more advice on factoring