Debt sale and purchase agreements

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Debt sale and purchase agreements
  • The debt sale and purchase market in the UK
  • The process of debt sale and purchase
  • Structure of a debt sale and purchase agreement
  • Debt sale and purchase documentation

Debt sale and purchase agreements

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

The debt sale and purchase market in the UK

The debt sale and purchase market has for some time been very active throughout the UK. It is an important way for lenders and debt sellers to reduce balance sheet liability and the number of specialist debt purchase and collection entities in the UK has grown significantly over the last several years. It is often used as a way to obtain value for under-performing accounts but sales take place in relation to all types of debt: regulated mortgages, loan and card agreements regulated by the Consumer Credit Act 1974 (CCA 1974), specialist debt such as store card debt and distressed and insolvent debt. The type of debt will impact the detail of the sale documentation but the mechanics and risk of the sale are largely similar.

This Practice Note covers the basic structure of a commercial debt sale arrangement for consumer

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