“Wouldn't it be better to sell it?” It's one of the most common questions when a company or institution looks at its past-due portfolio and calculates what it costs to keep chasing it.
They are two different decisions with different consequences, and the answer depends less on preference than on the actual condition of that portfolio. It's worth understanding what each path involves before choosing.
What selling the portfolio means
Selling a portfolio means assigning the receivables to a third party, who becomes the new creditor and collects on its own account. You receive a price —always below face value— and exit the problem for good.
In Ecuador this transaction is structured as an assignment of receivables (cesión de créditos), governed by the Civil Code (Código Civil). Three rules worth knowing before negotiating:
- The assignment “shall have no effect between the assignor and the assignee except by virtue of delivery of the instrument” (art. 1841). Without the original document in hand, there is nothing to assign.
- The assignment “has no effect against the debtor or third parties until it has been notified by the assignee to the debtor, or accepted by the debtor” (art. 1842). Until notice is given, the debtor can still validly pay the original creditor.
- Notice must be given by presenting the instrument, with the transfer noted on it and signed by the assignor (art. 1843).
That leads to the first practical conclusion: a portfolio without documents cannot be sold. It's not that it's worth little; legally, there is nothing to assign.
What managing it means
Managing means keeping ownership of the receivable and entrusting recovery to a third party acting on your behalf, usually for a success fee. You remain the creditor, you keep deciding what is negotiated and whom to sue, and you collect everything that comes in minus the fee.
There is a regulatory point that surprises many financial institutions: the control standard for auxiliary services of the popular and solidarity financial sector specifies that these companies operate exclusively within the defined auxiliary services, and that this does not include the administration, purchase or sale of portfolios. In other words: outsourced collections and portfolio purchases are legally distinct businesses, and they are not carried out through the same channel or with the same type of provider.
The four deciding factors
1. Documentation status. This is the filter before everything else. With complete instruments, both options are open. Without documents, a sale falls through and the only way forward is to rebuild the file and manage it.
2. Age of the delinquency. The older the portfolio, the closer the statute of limitations and the less it is worth in a sale. Remember that article 2415 of the Civil Code (Código Civil) gives five years for executory actions and ten for ordinary actions, counted from when the obligation became due (art. 2414).
3. The relationship with the debtor. This is the most underestimated factor. If the debtor is still a customer, or could become one again, selling the portfolio means handing that relationship to a third party whose collection practices you no longer control. For active commercial portfolios, it is usually a bad deal, however good the price.
4. Need for liquidity. A sale turns an uncertain portfolio into a certain amount today. If the problem you want to solve is cash flow rather than recovery, that is your real argument.
What makes sense depending on the stage of delinquency
Early-stage portfolio, active debtor. Manage it, no question. Here the value lies in collecting without breaking the relationship, and a sale doesn't allow that. Moreover, recovery is highest at this stage and a sale would capture very little of it.
Documented portfolio with locatable debtors. Manage it, and take to court what warrants it. This portfolio pays off when worked, and selling it gives away the recovery margin to the buyer.
Written-off portfolio, documented, highly dispersed small cases. This is natural territory for a sale. Many debtors, low balances, high unit collection cost. Here the math usually favors converting it into a certain price.
Written-off portfolio concentrated in a few debtors with assets. Manage it. Even if written off, a large case with located assets is worth much more worked than sold at a bulk price.
Undocumented portfolio. Neither option yet. First rebuild the file. Then decide.
An accounting fact that changes the conversation
If the portfolio has already been written off, article 207 of the Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero, COMF) requires that, prior to write-off, it be “provisioned at 100% of its book value”. The loss has already been fully absorbed.
That means anything that comes in afterward —whether sold or managed— is net recovery. It also means that the write-off does not close the case: the same article states that it “does not release it from continuing to collect the amounts owed”. Many institutions sell written-off portfolios for less than they would have recovered by managing them, simply because nobody took another look.
The question to answer first
Before requesting purchase offers or hiring collections, you need to know what's inside: how many cases have an instrument, how many are close to the statute of limitations, how many debtors can still be located, and how the balances are concentrated.
Without that assessment, the decision to sell or manage isn't a decision: it's a gamble. And whoever buys portfolios does run that analysis before making an offer.
How we approach it at FEXCOB
We manage portfolios, we don't buy them, and the first deliverable is never collection work: it's the assessment. Our collections for businesses service starts by auditing and segmenting the portfolio to know what is truly recoverable, through which path and within what timeframe.
That analysis is useful even if you ultimately decide to sell: it is exactly the information you need to avoid accepting a bad price.
You may also be interested in: why a written-off portfolio can still be recovered · what to demand from a collection agency
Legal sources cited: Ecuadorian Civil Code (Código Civil), articles 1841, 1842, 1843, 2414 and 2415 (current text, last amended November 26, 2025); Organic Monetary and Financial Code (Código Orgánico Monetario y Financiero), article 207 (current text, last amended June 4, 2026); Control standard for the qualification and supervision of auxiliary service organizations and companies of the popular and solidarity financial sector (Norma de control para la calificación y supervisión de las organizaciones y compañías de servicios auxiliares del sector financiero popular y solidario) (SEPS, Superintendency of Popular and Solidarity Economy).
This article is for informational purposes only and does not constitute legal advice for any specific case.