DCA selling debt in IVA

Nogglebert · 22 February 2018 at 12:05PM

I need to get something off my chest...

After all the stress, anxiety and mental illness of over ten years trying to pay our debts, the little kicks in the teeth still happen don't they? We're in the second year of our IVA and for the second time one of our debts has been sold on. The DCA buying the debt must be making a profit. So has the original creditor written off some of the debt? If this is true, does anyone else get angry at the immorality of this? Our IP says that nothing has been written off but why buy a debt if you're not going to make money on it?

Does anyone know how this works?

Thanks to all of you out there - this site has given us lots of information and support.

DorisTrousers · 22 February 2018 at 1:49PM

Hi,

Nothing really to worry about, perfectly common for this to happen. The IVA trumps the DCA so there is little direct change for you.

Creditors sell large chunks of bad debt at a time, not on a case by case basis. The DCA will pay for a portfolio of debts, which they then own. Some they will make money on, some they break even and some they will lose on. The DCA may actually lose out on your case.

The original creditor gets an income from debts that it cannot collect itself, and the DCA gets the debts for peanuts, leaving the statistical probability of making a profit on the lot, again rather than individual cases.

fatbelly · 22 February 2018 at 2:33PM

Yes, as above - standard practice. Companies buy debts in IVAs, DROs and bankruptcy. It the latter 2 cases they are unlikely to get any return at all, but every now and again a bankruptcy or DRO fails and then they can try for payment.

I can't imagine they change hands for very much.

DCA selling debt in IVA

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