What does pennies on the dollar mean?

Question

I have always heard it in movies but they move on too fast for me to process it.

In: Other

Answer 1

It means buying something at a very low cost compared to the original price. For example, debt collectors buy debts pennies on the dollar. Let’s say you own $10K in credit card bills with interest, and late fees and it goes to collection. The debt collector may buy the debt for 10cents on the dollar. That means that they bought your debt for $1,000 but you still owe them the original sum of $10K. This is why you can negotiate with them and pay a lot less than what your originally owe. Unfortunately, by this point your credit score is already affected.