Why do companies not purchase debt at debt collector prices and forgive it like Stephen Colbert did every year to massively reduce their tax liabilities?

Question

Why do companies not purchase debt at debt collector prices and forgive it like Stephen Colbert did every year to massively reduce their tax liabilities?

In: Economics

Answer 1

Consumer debt is purchased, as an asset. It is not purchased as a debt. The negative $15,000 consumer debt becomes a positive $15,000 asset for the company. The older the debt the less money it’s worth you can purchase millions in consumer debt for a few hundred. Technically you could make a company worth five million on paper for less than $1500.