The Colombian economy has shown immense improvement over the past three years— it has grown at an average of 2.7% since 2017. These growth rates are higher than those for Brazil, Argentina, and many other big-players in the Latin American continent.
With the government focusing on reducing government debts, introducing fiscal austerity measures, and improving GDP rating—things are finally looking up for the country. Indicators like Moody’s sovereign rankings have also shown an improvement, with the representatives from the agency showing confidence in the country’s debt management strategies.
This spells good things for investors who are looking to diversify their portfolio and benefit from the many government-facilitated investment opportunities in Colombia. At this moment, you can invest in taxi loans, government debt judgments and mortgage loans. According to my sources, these are prime investment options with many players in the market facilitating foreign investment inflows to generate major returns. One of the safest bets you can make is investing in the Colombian government’s debt judgments.
This article will basically describe what debt judgments are, why you should invest in them in Colombian.
What is Debt Factoring?
Debt judgment investments have been around for a very long time and are generally considered risky investments. Before we can talk about investing in judgments, we should understand what debt judgments are. Imagine that person A takes a loan from B that they never return—B can sue A for not paying them back and the courts will pass a judgment recognizing that the debt has to be repaid. The court itself won’t do anything for recovery—the judgment is legal recognition of an obligation on the part of A.
In certain situations, the court passes ownership of some of A’s assets to B—without granting B the right to sell them off. Now sometimes, Mr. A still won’t pay the money back, and Mr. B finds themselves really strapped for cash—so what do they do? Person B can approach a third-party who will buy off the debt judgment for the original amount loaned and transfer ownership of the judgment to themselves.
This third-party can now call in the debt to receive the full amount of money loaned out and any interest accrued during the non-payment. This way, person B gets their money back and the third party makes a profit from their investment.
There’s still a risk associated with this investment because what if the original creditor goes bankrupt and can’t pay the money back? There’s little to be done in that situation where the money is unrecoverable—but what if you’re buying off judgments passed against a government?
Investing in Debt Judgments against the Colombian Government
While it’s very likely that people might go bankrupt, there’s no way that a government can go bankrupt. Even if it does, it’ll very likely get bailout packages or some other financial assistance that ensures it stays in business. For this reason, investing in government debt judgments is possibly the safest investment anyone can make.
Investments in judgments against the Colombian government debt have become a popular investment instrument for foreigners. Middlemen approach people who are owed money by the government to buy off the debt at discounted rates—using the money they get from foreign investors to make profits off the debt when the government pays it back. The middlemen also distribute the profits among their investors based on the size of initial investments.
Now that the Colombian government has managed to clamp down on domestic debt, people are slowly moving their capital into the country’s debt markets. This is where we get the investment plan.
Investing in Debt Judgments in Colombia
The Gutierrez Group is a wealth management firm that is creating investment funds working with public debt judgments in Colombia. The company is buying up relatively safer debts in institutions like law enforcement agencies, the ministry of defense and other branches of the Colombian government. They’re taking advantage of the fact that any claims taken to court take about five to eight years to process—a time span that the average Colombian investor can’t afford to wait. The payment for these debts also takes about two to four years, which only adds to the time they have to wait around.
The Gutierrez Group buys this debt to transfer it to their name instead, to collect on the indemnities. They collect funds from interested investors to finance the debt transfers and offer great returns on these investments. Unlike other investment companies that work through middlemen to get the job done, the people at Gutierrez Group handle all of the transactions and transfers themselves.
The process of buying debt involves the following five steps:
- Once a judgment is passed, the team at Gutierrez Group negotiates debt purchase.
- They set a price and finalize the paperwork to transfer ownership.
- It takes 6–8 weeks to transfer ownership.
- Once the notice is received, payments are executed to finalize the transaction.
- The government pays the debt back within two to four years and the returns are paid back to the investors.
The returns offered by the Gutierrez Group are:
- Investments between $50,000 and $150,000—Annual interest rate of 10%.
- Between $150,000 and $500,000—Annual interest accrued at a rate of 11%
- Between $500,000 and $1,000,000—Interest accrued annually at a rate of 12%
- Investments over $1,000,000—Interest accrued at a rate of 13%
Assuming that you keep your money with these guys for a three year period, you can stand to make as much $443,380 with an annualized ROI 14.77%. I’d say that’s a pretty good rate of return,
Investing in Colombian debt with the Gutierrez Group is perhaps one of the best investments anyone can make. Considering the rate at which the Colombian economy is growing, it’s very likely that the government’s going to continue paying off its debt. Since paying back the debt is the top priority for the state at this moment, everyone can make a fair bit of money over the long-run if they choose to hold down their investments.
I hope you enjoyed reading: Investment Options in Colombia—Factoring Debt Judgments. I would suggest you reach out to The Gutierrez Group here for more information. You can reach them directly at +57-4 3228898 I truly believe this is a unique investment that could work very well for you. Here are a few articles about Colombia that I know you’ll love!
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and Director of Content at Escape Artist. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.
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