In Debt Collecting, Location Matters, so says the headline of a WSJ article. It didn’t talk about business debt but for any business debt below the small claims threshold amount, the statement probably also applies. Want to know the states that distressed debt buyers (aka collection agencies!) prefer. Read this: “Brokers for distressed debt say investors like states such as Illinois, Maryland and New Jersey, where laws permit them to seize assets such as cars, pension payments and a portion of debtors’ wages. Consequently they try to buy loan pools from those states.” The article also references Indiana, Ohio, Virginia, and Minnesota as great states to pursue debt collection in. Hah! This is excellent information to have.
“Brokers say investors shy away from buying bad debt from some other states.”
“Brokers say geography is the single biggest factor in how much debts fetch. Accommodating laws and judges often mean the difference between a profit and loss on debts pursued in court.”
“In states where laws are more favorable to debt collectors, they pay more for such debt. Unpaid consumer debt sells for about seven cents on the dollar in Indiana, compared with two cents in Texas.”
Just be aware. To read more of this full length article, In Debt Collecting, Location Matters, you’ll have to grab Monday’s copy of the WSJ or subscribe to WSJ online.