Chosen by Asker

The amount that companies pay for bad debt depends on the type of account and its age. In general Debts that have recently been charged off: 6 to 7 cents on the dollar. Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar. Years-old, out-of-statute debts: A penny or less. A growing number of companies are discovering that these very old accounts, once thought to be noncollectable, are just the opposite. Squeezing even a small payment from these debtors can make collection activities worthwhile. The economics are pretty simple. For $100 of (old debt), you pay 25 basis points -- a shiny quarter, if you get (the debtor) to pay you $1, you got your money and covered your costs.

Source(s)

The A.R.M. Insider

by Sgt Big Red

6 months ago

Asker's Rating: 

Varies by amount owed and contract MBNA has with the collection agency.

by sassy2- 6 months ago