If A borrows from B, A now owes B
Then C shows up and pays B with the agreement that it settled A’s debt to B.
A does not know any agreement was made but the original A owes B
A goes to pay B.
B says A doesnt owe B.
C says A owes C
But A did not make an agreement that he owed C.
How does A owe C now?
It seems to me that: C gave A the gift of settling A’s debt to B.
In: Economics
Lenders can sell debt to others. It was real common prior to the mortgage crisis in 2010. Big banks found it was more profitable to sell blocks of high risk mortgages to other lenders than to hold them.
Lenders can also sell bad debt to collectors who pay them a fraction of the outstanding balance then try to collect from the borrower.
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