The Creditor's Protocol How to Prepare Charge-Offs for a Strategic Sale
For a lender or creditor, a portfolio of charged-off debt is a dormant liability. This is the definitive protocol for transforming that liability into an asset and preparing it for a confidential, high-value, off-market sale.
Executive Summary
In the current credit cycle, holding non-performing assets is a significant capital drag. A strategic sale of your charge-off debts is the most effective strategy for balance sheet optimization. However, the price you command is not determined at the point of sale; it is determined by your preparation.
The Pre-Sale Preparation Protocol: A Step-by-Step Mandate for Creditors
The process of selling debt begins long before a buyer ever sees the file. Price is a function of preparation. This is our four-phase mandate to ensure your portfolio is positioned to command a premium.
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Phase 1: The Internal Mandate
Before any data is pulled, your internal teams must be aligned. This means gaining consensus from your CFO, Chief Risk Officer, and General Counsel that a sale is the intended strategic path. This ensures a smooth execution once a buyer is engaged.
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Phase 2: The Data Tape Assembly
This is the foundational document of the sale. Your team must assemble a clean, standardized "data tape" (typically an Excel file) with the following non-negotiable fields for each account:
- Full Account Number
- Charge-Off Date & Original Balance
- Full Borrower Name, Address, and SSN (can be masked initially)
- Date of Last Payment
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Phase 3: The Media Chain Audit
For institutional buyers, "media" (the original documentation) is critical. Your team must be prepared to provide a complete chain of title, including:
- The original signed contract for each loan.
- A full history of monthly statements.
- Any relevant default or charge-off notices sent to the borrower.
The doctrine is simple: No media, no value. A portfolio with complete media is a defensible asset; a portfolio without it is a speculative risk.
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Phase 4: The Strategic Seller Survey
Upon engaging our firm, we will provide a "Seller Survey." This questionnaire is designed to capture the final strategic details a buyer will need, including the portfolio's placement history (has it been with other collection agencies?), any known bankruptcies, and the reason for the sale. Answering this honestly allows us to position your portfolio correctly.
The Advisor's Role: Executing the Off-Market Sale
Once your portfolio is prepared according to this protocol, the role of an off-market loan sale advisor begins. We take your institutional-grade portfolio and execute a confidential, private treaty sale to our network of vetted capital partners, ensuring you achieve maximum value with zero reputational risk. Preparation is your job. Execution is ours.
Initiate a Confidential Mandate
Ready to transform your non-performing assets into working capital? Contact us to begin the preparation and sale protocol.
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