Sort any consumer portfolio by balance and a line appears. Above it, accounts are worked. Below it, they are sold to a debt buyer or written off — not because they are worth less as accounts, but because a person's attempt costs the same against a small balance as against a large one. This playbook is about that line: where it comes from, how to find yours, and what changes when the cost of an attempt stops being a person.
The cost floor, stated plainly
An agent's time is priced per attempt, and an attempt against a $200 balance takes about as long as one against a $2,000 balance. So there is a balance at which the expected return from working an account falls below the cost of trying — and below that balance, selling pays better than working. Offshoring moves the floor down; it does not remove it, because the attempt is still a person's time.
What a lender receives when it sells is set by the market for charged-off consumer debt, and a widely quoted figure is around $3.25 per $100 of principal. That is not a Finosu number; it is the price of the alternative. At that price, selling a small-balance account means parting with the large majority of its principal for a certain small sum today.
The line is a price, not a verdict
The accounts under your floor were never worth less. They were priced out by the cost of a human attempt. A price is a thing that can change.
Find your own line
- Take one portfolio and sort eligible delinquent and charged-off accounts by balance.
- Ask your servicing lead, honestly, below which balance accounts are not actively worked today — whether by policy or by queue reality.
- Count the accounts and sum the principal below that balance. Most lenders are surprised by the second number.
- Note what those accounts currently return: a sale price, a contingency recovery, or nothing.
That sum is the inventory this playbook is about. It is not a segment Finosu specialises in; it is the part of your book that the arithmetic of staffing has been deciding for you.
Sell, work, or write off
| Option | What you get | What you give up | When it makes sense |
|---|---|---|---|
| Sell | A certain small sum now | Most of the principal; the borrower relationship; control over how the borrower is treated | When you cannot work the accounts and need the cash now |
| Work with a staffed team | Whatever the team recovers, less fees | Nothing on accounts above the floor; the floor itself is the limit | When the balances are above your floor |
| Write off | A tax outcome | Everything else | When neither of the above is available |
| Work with software | Whatever is recovered, at a cost per account that is compute rather than a person | The certainty of a sale | When the accounts are below a human floor and above zero |
Design a pilot that answers the question
- One batch, defined by balance range and stage, sent as a CSV: balances, contact details, consent and dispute status.
- Eligibility reviewed together before any outreach — exclusions, bankruptcies, active disputes, cease requests.
- Program rules agreed: contact preferences, repayment options within your policy limits, escalation paths, tone.
- A comparison fixed in advance: what did accounts like these return under the current approach, over the same window?
- The measure fixed in advance: cash recovered after fees. Not gross, not promises to pay.
Nothing changes in your existing arrangements to run this. No contract is disrupted, no team is displaced, and the dollars are net new relative to what those accounts return today.
The borrower experience on a small balance
A borrower with a $200 balance is a person who owes $200, and the standards do not change with the amount: the same identification and disclosures, the same consent and frequency rules, the same right to dispute, the same option to reach a person. What changes with a software-run program is that the account gets contacted at all, in the borrower's channel, with a way to pay or set up a plan in the same conversation. That is a better outcome for the borrower than a sale to a buyer they have never heard of.
What to measure
| Measure | Why it matters |
|---|---|
| Cash recovered after fees, per batch | The only number that compares to a sale price |
| Accounts contacted and accounts reaching a plan or payment | Shows the program is reaching the book, not just the easy end of it |
| Disputes, opt-outs, complaints | The borrower-experience and compliance signal, tracked as first-class |
| Exceptions flagged and reviewed | Shows the escalation path is real |
| Time from CSV to first contact | Track the time needed for eligibility, program-rule and disclosure review |
Widen from the first batch
If the batch outperforms its comparison, the next question is scope, not vendor: move the balance range up, move earlier in delinquency, or add a portfolio. Because the program's cost is compute, the same standard can be applied to the whole book — small balances included — and the entry batch was simply the reader's choice of where to start.
Questions
What is a cost floor in collections?
The balance below which a human attempt costs more than it can be expected to return. It exists because a person's time is priced per attempt regardless of the balance, so every staffed operation has one. Below it, accounts are typically sold or written off.
How much do lenders get when they sell charged-off debt?
A widely quoted market figure is around $3.25 per $100 of principal for charged-off consumer accounts. The exact price depends on age, product and documentation. It is the price of the alternative to working the accounts, not a Finosu figure.
Does Finosu only handle small-balance accounts?
No. Finosu works the whole book to one standard, from early delinquency through charge-off, at any balance. Small balances are where the difference from a staffed operation is most visible, which is why many lenders start there, but the entry batch is your choice.
Related
This page is general information for lenders, not legal advice. Descriptions of other companies reflect their public positioning as of October 2026 and are not endorsed by them; confirm current scope and terms with each vendor.