Recently heard of a church purchasing $3.3 million in resident debt for 15k and then cancelling all of it.
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Suppose I give you an IOU that says I owe whoever has it $1,000. In theory, that IOU should be worth $1,000 to you. But when you come to me and and try to get the money, I tell you that I haven’t got any money, and even if I did, I wouldn’t give it to you, so nya-nya-nya. If after several attempts to collect, I still appear to be both broke and uncooperative, you may by thinking that this IOU is in fact completely worthless. So if company came along and said “We will give you $100 for that IOU” you’d probably be pretty tempted to take it. $100 is better than nothing. Not only do you get at least SOME money, but now you can stop worrying about me, the hostile broke guy, who you are probably pretty sick of talking to.
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