I have always heard it in movies but they move on too fast for me to process it.
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Imagine a company goes bankrupt. The creditors (usually a bank) receive all its assets in part-payment of the debt.
The bank now has all this stuff (maybe buildings, inventory, patents) but wants money. So they sell them.
Usually they can’t get what they’re worth so they get a fraction of it (pennies on the dollar).
Another option is a business goes into some form of bankruptcy protection (in the UK its called administration). The administrator tries to negotiate with the creditors to accept way less than they’re owed – as the alternative is getting nothing when the business collapses. Again, pennies on the dollar of what they’re owed – but something is usually preferable to nothing.
Thank you for all the replies!
I’ll give you 3 pennies for every dollar of value. 3/100 so 3% of the actual value. you’ll sell it really cheap.
If something you own is worth $100 and someone offers to buy it for $2. They are offering you 2 pennies per dollar of its worth.
You have 10k worth of medical debt that is sold from the original Healthcare provider to a collection company for 1k. That collection company purchased the debt for pennies on the dollar with hopes to get you to settle the debt for 2k, making them money.
When discounts happen, you’re paying a fraction of what its worth. If something cost $10 and you paid $2 for it, you literally paid pennies on the dollar for it (20 per dollar that is).
Most medical debt is like this – if someone owes a medical facility $1000 bill, and its written off and bought by a scummy credit collections company (not the same as a collections group within the medical practice) they might pay $75 for it and then they can try and collect on it (hence they are paying 7.5 pennies per dollar of debt owed). Then they try and go after you for the $1000 or any portion of it over the $75 they paid for it. Which btw – is total BS as most places that buy this medical debt are not really entitled to it as they typically don’t have enough proof as being NOT the end customer you owed. But that’s a whole different story.
Think of it like a percentage. One dollar being 100%, Pennie’s on the dollar would be buying something for a percentage of what it’s worth. Usually very low, think $0.05 of $1, or 5% of its value
You buy a candy bar for $1. I offer you 5 cents for it.
5 pennies for one dollar.
Commonly this is talking about real estate. A house is valued at $500,000 for example and someone offers you $50,000.
It is a hot sunny day outside and I just bought two ice cream cones for a dollar each. When I started eating it I realized that before I can finish eating the first one, the second one will be melted. Then you walk by.
Desperate to get rid of the second cone, I tell you that you can have it for three cents, because it is about to drip down my sleeve, but I don’t want to feel like I gave it to you for free. Back when this saying was made up it was bad to give someone something totally free because of pride. You buy the ice cream cone for three pennies on the dollar.
Sometimes bad people will pretend they are giving you something for pennies on the dollar just to trick you into buying more expensive stuff; like when they put candy at the cash register so you pause long enough to think about smoking. Then they make it illegal to just buy one cigarette, so you have to get twenty just to make sure you stay addicted. Bad people!
A good example would be that there are certain companies that buy debt at pennies on the dollar, so they’ll pay $200 for a $1000 credit card debt (essentially 20c for each Dollar), then try to recover $500 of the $1000 debt, thereby making $300 profit on what they paid.
I always thought it refered to shares. Say you agree to a business venture and you get paid pennies on the dollar that means you get one penny for every dollar of profit the business takes in.
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