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?
In: 4529
The whole point of debt is that it’s theoretically an amount you can pay eventually over time but it is either impossible or undesirable to pay it all now.
If someone is selling debt for below its payoff value (what you actually owe at that time, minus any future interest) it’s because they have decided it’s worth eating a loss to get the cash now (urgency) or they have concerns about your ability to pay and don’t want to shoulder the risk.
There are some nuanced scenarios where they are selling for less than payoff value because they just don’t want to hold it but in those cases it’s still close enough to it that if you could afford it you wouldn’t have taken the loan in the first place.
Odds are, if they’re selling it for far enough below payoff value that it’s comparable to a monthly payment or anything like that, it’s because you are deemed a very high risk and that generally means you’re very unlikely to be able to afford anything more than your minimum payments anyway.
The whole point of debt is that it’s theoretically an amount you can pay eventually over time but it is either impossible or undesirable to pay it all now.
If someone is selling debt for below its payoff value (what you actually owe at that time, minus any future interest) it’s because they have decided it’s worth eating a loss to get the cash now (urgency) or they have concerns about your ability to pay and don’t want to shoulder the risk.
There are some nuanced scenarios where they are selling for less than payoff value because they just don’t want to hold it but in those cases it’s still close enough to it that if you could afford it you wouldn’t have taken the loan in the first place.
Odds are, if they’re selling it for far enough below payoff value that it’s comparable to a monthly payment or anything like that, it’s because you are deemed a very high risk and that generally means you’re very unlikely to be able to afford anything more than your minimum payments anyway.
The whole point of debt is that it’s theoretically an amount you can pay eventually over time but it is either impossible or undesirable to pay it all now.
If someone is selling debt for below its payoff value (what you actually owe at that time, minus any future interest) it’s because they have decided it’s worth eating a loss to get the cash now (urgency) or they have concerns about your ability to pay and don’t want to shoulder the risk.
There are some nuanced scenarios where they are selling for less than payoff value because they just don’t want to hold it but in those cases it’s still close enough to it that if you could afford it you wouldn’t have taken the loan in the first place.
Odds are, if they’re selling it for far enough below payoff value that it’s comparable to a monthly payment or anything like that, it’s because you are deemed a very high risk and that generally means you’re very unlikely to be able to afford anything more than your minimum payments anyway.
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