I’ve seen stories of individuals buying up a bunch of debt for cents on the dollar then just forgiving it. Why can’t this been done on an individual scale?
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For what it’s worth, you sort of can do this.
My parents dug themselves into a debt hole and were heading towards bankruptcy. I stepped in and called each creditor. Let’s say they owed $5000 and they were paying $100/month. I’d tell the creditor that they were facing bankruptcy, and that I was able to pay $2000 in a lump sum now to completely cancel the debt. Otherwise we’d start missing payments and who knows what would happen. They might make a counter offer of $3000 and maybe I’d take it or I’d say $2000 was our maximum budget. In the end I think I cleared some $20k in debts for about $8k. I don’t know what it did to their credit, but it got them out of a downward spiral. I was then able to set them up on a budget with a debit card that only had free spending money on it (bills were paid out before money went to the debit accoutn) and didn’t do overdraft. They didn’t love it, but it kept them from ending up on the street.
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