Distressed Debt Valuation

The sale of distressed debt, if supported with the current financial condition of debtors, provides a unique opportunity to improve pricing decisions and extract capital at a faster pace with higher recovery rates from otherwise, dormant, nonperforming assets. This provides financial institutions with a welcome infusion of capital to strengthen the balance sheet and positively impact performance while expanding lending opportunities.

By integrating credit bureau data with proprietary algorithms, logicpath’s Distressed Debt Management service helps community banks and credit unions clear nonperforming assets off their balance sheets with portfolio valuations that better capture the debt recovery opportunities.

By reducing the volume of non-performing assets in their portfolios, these institutions also benefit from lower Allowance for Lean and Loan Losses (ALLL) reserve requirements, freeing up capital to expand an institution’s revenue generating initiatives and strategic options. 

Distressed Debt Management service:

• Strengthens the balance sheet with capital infusions from the sale of nonperforming assets.
• Improves valuation and pricing decisions with recovery ranking scores that incorporate debtor's’ current financial health and propensity to pay.
• Strengthens the financial health and portfolio performance by reductions in ALLL capital reserve requirements due to the sale of nonperforming assets.
• Improves the operational efficiency of your institution’s debt recovery, collections, and discharged debt valuation services.

The incorporation of credit bureau data with custom analytic models significantly improves the ability to rank order non-performing accounts by their predicted recovery scores, contributing to improvements in pricing decisions and liquidation rates.