Sell debt or keep collecting
Enter the face value, offer price, expected recovery and collection cost. Compare the sale with keeping and collecting in today’s money, and see the break-even price.
Break-even price
At 8%, the sale pays €80,000. Collecting is worth €122,426 today, so the offer is €42,426 short, and a price above 12.24% beats keeping.
Collecting beats a price of 8% only if it recovers more than 11.76% of face value.
Keep collecting or sell
The rising line shows what collecting has brought in, in today’s money, and the flat line shows the sale paid today. Where they end tells which is worth more.
Figures
| Face value | €1,000,000 |
| Sale proceeds | €80,000 |
| Gross recovery | €180,000 |
| Collection cost | €45,000 |
| Net recovery before discounting | €135,000 |
| Value of keeping | €122,426 |
| Sale against keeping | −€42,426 |
| Break-even price | 12.24% |
| Break-even recovery | 11.76% |
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The next step is to decide account by account. Collections rules on days past due and payment history pick which debts to keep working and which to sell. Start free
Show calculation
Sale proceeds = Face value × Offer price Monthly net recovery = Face value × Expected recovery × (1 − Collection cost) ÷ Recovery period Value of keeping = Σ Monthly net recovery × (1 + Yearly discount rate) ^ (−m ÷ 12), m = 1 … Recovery period Sale against keeping = Sale proceeds − Value of keeping Break-even price = Value of keeping ÷ Face value Break-even recovery = Expected recovery × Sale proceeds ÷ Value of keeping
Recoveries come in evenly and the price is paid today. The calculation includes no tax, sale costs or recoveries after the last month, and uses your own recovery and cost estimates from past collections.
Selling debt or keeping it
The calculator compares a debt buyer’s offer with the value of keeping and collecting the debts. It uses face value, offer price, expected recovery, collection cost, the months for recovery and the discount rate.
The result shows the sale proceeds and the value of keeping and collecting in today’s money. Use the break-even price to compare the offer with your own recovery estimates.
Common questions
Should we sell a debt portfolio or keep collecting?
Compare the sale proceeds with the value of keeping and collecting in today’s money. The calculator uses your recovery, collection cost, timing and discount rate.
How much is a defaulted debt portfolio worth?
Its value in this comparison depends on the recovery you expect, collection cost, timing and discount rate. The calculator compares that value with the sale proceeds from the offer.
How do I work out the value of selling an old invoice?
Enter the invoice’s face value, the offer price and your estimates for recovery, collection cost and timing. The calculator compares the sale proceeds with the value of continuing collections in today’s money.
What is a break-even price for a debt sale?
It is the price at which the sale proceeds equal the value of keeping and collecting today. A price above it beats keeping, based on the estimates entered.
How are debt collection recovery rates used in the comparison?
The expected recovery is entered as a share of face value. The calculator uses it with collection cost, the recovery period and discount rate to work out the value of keeping and collecting today.