Author Topic: Charge off or sell off?  (Read 3871 times)


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Charge off or sell off?
« on: February 24, 2015, 02:36:02 PM »
Hi Folks,

I'm a relatively new investor in P2P lending.  So, while I have tried to research this question, I can't seem to find any good info on what the advantages and disadvantages are of retaining a note bound to be charged off as compared to selling the note on folio for a deep discount and taking the loss that way.  About all I can find says, if you sell it off you won't have to worry about future recoveries and can take the whole loss against your gains that year.  My account is not an IRA so there are tax implications. 

Any good links or advice that you've run into on the pros/cons of either?

At the moment, I've one note that "straight rolled" from issue to now 90+ days delinquent, and the borrower's credit score is dropping like a rock.  I've another note that recently went into Chapter 13, so there's nothing I can do about that one.  And a few others just rolled into the 30+ days bucket. 

I am diversified with $25/note investments, with a few exceptions from folio purchases, so these bad apples are not spoiling the whole bunch.  Just trying to figure out what the lessor of two evils are at this point, either way it's a stinky diaper. 

Thanks in advance!


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Re: Charge off or sell off?
« Reply #1 on: February 24, 2015, 03:51:31 PM »

or   Lending Club Secondary Market: Profitability of Trade and Recovery Rate with Loan Status at Listing

Also there are many other good threads on charge-offed loans on the LC PeerCube forum.


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Re: Charge off or sell off?
« Reply #2 on: February 24, 2015, 09:54:59 PM »
Consider reviewing the posts in FOLIOfn - LC section on this forum. Most posts in this section are related to secondary market for Lending Club.
Anil Gupta
PeerCube Thoughts blog