/biz/ - Business & Finance

>>651411
Is this a joke?

>You could do the humane thing and settle with someone who owes a ridiculous amount of debt for a paltry sum per month.
That's not profitable.

>How would one go about buying debt?
Like most things, there are exchanges. Bonds are a form of debt that people commonly buy. Alternatively, people start companies (e.g. debt collection agencies) and actively advertise to buy debt directly.

>>651416
Why would it be a joke?

I'm entirely serious. I heard about this on a podcast and I want to know if it is a feasible thing to do. Apparently lots of people do this already.

>>651420
Oh its just I've never heard of any of this

>>651424
It's definitely a thing, but the people who do it aren't in the business of being humane.

>>651411
You can buy and sell debt, the problem is getting the money. Shaking people down is fairly hard to do because of harassment laws, and it could end up backfiring on you and end in a settlement for the indebted. Alot of debt is simply traded back and forth with diminishing returns for each holder. It's not worth it to go into that business.

I've purchased mortgage debt before. It's actually a good income source.

>>651424
There was an article in the NYT Magazine around the same time as the This American Life story.
http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html
Basically it works like this: banks write off the loans and sell them for 2cents on the dollar to various debt collection agencies. These agencies try to collect and/or buy and sell each other's debt. Once they've squeezed all they can out of this debt, they sell it to guys who are little more than gangsters with a thin veneer of legitimacy. These guys (who are often intimidating ex-cons) use intimidation and coercion to collect on the debts (usually held by poor people). The crazy thing is that the debt collection agencies who bought the loans from the bank might sell the same debt (it's just an excel file anyway) to 2 or 3 of these low-level street thugs/debt collectors. Someone might pay one collection outfit and then have another knocking on their door trying to collect. None of these people who owe the money have the financial knowledge to ask "prove that you are the legitimate owner of my debt" - which would stop guys like this in their tracks.

>>651425
are you retarded? the debtor owes the creditor. the creditor knows it's a hassle to get the money owed and so instead it sells the bad debt in the market. people buy the bad debt because they know that they can recover an amount greater than what they paid for it, but less than par. what's the issue here?

>>651457
What are you babbling about? The debtor didn't pay the original creditor for a reason. The people who buy debt are extremely aggressive about collecting debt. They know that most of the debt they buy is actually worthless (i.e. will never be paid) so they need the ones that do pay off to pay off pretty well.

Sorry, but the Rothschilds already own 99.9% of the world's debt.

>>651443
This really happens though? Sounds illegal and/or a good way to get shot.

>>651443
>>651411
i listened to this exact story a couple of months back

basically, just watch the Sopranos and learn to break some knee caps. you're literally competing with other gangsters to squeeze money out of degenerates

>>651411

there's a thread on 2+2 /finance/ that is about a guy who started his own debt collection agency and started making mad fucking money despite his early fuck ups.

>>651531

lol a lot of shit happens to poor people and they have no recourse because they can't do anything or don't know what to do and don't have the resources.

Be glad you aren't a basketball american or poor.