Decide on Your Business Model for debt buying
Debt buying processes vary depending on the reasons for your purchase of the debt and the type of debt you are interested in buying. For example, you may be interested in buying debt because you are a debt collection agency and wish to increase internal debt collections. Or, you might purchase debt to broker to other buyers (i.e., buying now to resell the debt later for a profit).
Even with your purpose defined, you must narrow down the type of debt you want to purchase, which could include:
- Credit card debt (This accounts for 75% of debt purchased in the United States, according to the Federal Trade Commission.)
- Payday loans
- Student loans
- Bad checks
- Auto loans
- Bail bonds
- And more
Debt buying is a diverse and complex business, so you must be clear early on about the particular niche you want to enter.