Campaigners in USA buy individuals' debts for pennies and write them off

[Riz]

Campaigners in USA buy individuals' debts for pennies and write them off

[Pixie]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

Well done to them!

[nightwatch]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

Pity we can't do it here. I would gladly donate to help out those that realy need it,

[SaltnVinegar]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

Its an interesting discussion...........

If an original creditor is able to sell a debt onto a 'debt purchasing firm' then why is it not possible to just accept a F&F offer of the same amount?

Or what would stop a collection of private individuals from setting up a company and then 'purchasing' their debt from the original creditors.

[kilasuit]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

if it was bought at £1 and settled at £2 its still profit

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

It would be good to see some legislation that said that the loan had to be offered to the debtor at the same price it was sold to the DCA before the deal was done.

Or perhaps to one of the debt charities, who would then reclaim it in installments from the debtor without any profit or interest. Perhaps CCCS

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

An additional thought, wouldn't this put DCAs out of business ?

Wouldn't that be a shame?

[Spent2much]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

It would be good to see some legislation that said that the loan had to be offered to the debtor at the same price it was sold to the DCA before the deal was done.

Or perhaps to one of the debt charities, who would then reclaim it in installments from the debtor without any profit or interest. Perhaps CCCS

It's big business dca

[SXGuy]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

If you can obtain a CCL, register a company, and tender the banks to buy bad debt, then theres no reason why you couldnt accept F & F's as low as £2.

What you couldnt do, is buy a debt for £5 and accept a F & F for £2 as that would be a loss, and a company wouldnt be able to trade at a loss for very long!

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

I would like to know the nitty gritty about how these DCA's actually buy the debt.
The creditor obviously takes it off his balance sheet and writes it off his profit and loss against tax and then sells?

What exactly is he selling, I am sure it is all perfectly above board i just need someone to explain it to me.

From reading my regular free copy of credit today over the years, I get the idea that the whole relationship is more than a little incestuous, a lot of people selling stuff that they don't really own, to other people who turn out to be themselves, in the guise of another company.
A person less afraid of a suit for litigation may almost say it was money laundering but I could not possibly comment.

What we would need is someone who works for one of these DCA's to be converted to the "light side", sort of a Darth Vader in reverse, someone who could clue us in , on how it works and maybe open the door to spoil their little game.

[SXGuy]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

How they sell debt, is probably no different to how you are lent money.

An agreement is drawn, one is paid, the other owns the rights.

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

How they sell debt, is probably no different to how you are lent money.

An agreement is drawn, one is paid, the other owns the rights.

You would think, but what they are selling is equity,
When you took out your loan you got a sum of money, all that changes hands here is the promise of repayment, the actual loss has been written off against tax.

[SXGuy]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

Actually, its no different.

When you agree to a loan, the agreement becomes equity. The money is drawn in to existance once you sign that agreement.

Some numbers are added to your account, you arnt actually given physical cash, and no one actually loses money and hands it over to you.

You assume it is, because you can draw on it, but thats from the bank, who gives you the money based on the numbers shown in your account.

Banks, lend 10 times or even more, to the value of deposits, its called fractional reserve.

What you repay, is the only thing physical about it, and the agreement is only a promise to repay the debt you signed up to agree to.

EDIT: bad debts, are actually listed on balance sheets, balance sheets are assets over liabilities. even that in itself is not physical money, any accountant will tell you that.

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

No when i get a loan i like the cash

[gravytrain]

Re: Campaigners in USA buy individuals' debts for pennies and write them off

Actually, its no different.

When you agree to a loan, the agreement becomes equity. The money is drawn in to existance once you sign that agreement.

Some numbers are added to your account, you arnt actually given physical cash, and no one actually loses money and hands it over to you.

You assume it is, because you can draw on it, but thats from the bank, who gives you the money based on the numbers shown in your account.

Banks, lend 10 times or even more, to the value of deposits, its called fractional reserve.

What you repay, is the only thing physical about it, and the agreement is only a promise to repay the debt you signed up to agree to.

EDIT: bad debts, are actually listed on balance sheets, balance sheets are assets over liabilities. even that in itself is not physical money, any accountant will tell you that.

Sorry rude reply.