[ GUIDE ]
What Is a Master Servicer for Charged-Off Debt?
A master servicer for charged-off debt is a single partner that manages a lender’s entire post-charge-off recovery: scoring accounts, placing them with collection agencies and law firms, moving volume based on results, overseeing compliance and reporting on every account. Instead of managing many vendors, the lender manages one. Paragon is an independent master servicer based in Greenville, South Carolina.
What a master servicer does
Scores each account before placement, chooses the right channel (agency, legal, debt settlement, deceased, bankruptcy or sale), places accounts with vetted partners, ranks those partners on one scorecard, moves volume to the best performers, keeps account documents organized, audits every vendor and reports on every dollar.
How it compares
Collection agency: works the accounts placed with it, and is one vendor among several.
Debt buyer: purchases the accounts outright, so the lender gives up future recovery in exchange for cash now.
In-house team: the lender manages agencies, law firms, documents and compliance itself, with its own staff.
Master servicer: one partner manages every agency, law firm and channel for the lender, which keeps ownership of the accounts and pays on what is collected.
When a master servicer makes sense
When you place accounts with several agencies or law firms, struggle to compare their results, spend staff time chasing status and documents, or need cleaner recovery numbers for your board, auditors or bank partners.
Frequently asked questions
How does a master servicer differ from a collection agency?
An agency collects on the accounts it is given. A master servicer decides where every account should go, manages all the agencies and law firms, and holds each one accountable on the same scorecard.
How does a master servicer differ from selling debt?
When you sell, the buyer keeps future recoveries. With a master servicer you keep the accounts and the recoveries, and you can still sell segments when the numbers favor it.
How are master servicers paid?
Paragon is paid on what is collected. Upfront scoring of your file is free.
Who uses a master servicer?
Banks, credit unions, auto and consumer lenders, fintechs and debt buyers that want one accountable partner for everything after charge-off.
See what your file would collect
Send state, zip, balance and charge-off date. We will show what each account would collect, when and at what cost, by state, with and without a suit.
