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How to become a debt buyer

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Re: How to become a debt buyer

#71

Post by omginternets »

BobJS wrote: post #64
omginternets wrote: post #54

Earlier quoted context omitted.

>Is there anything inherently shitbag about collecting debts? What's practically involved in collecting debt? I don't actually know.

Lots of sending out letters and making phone calls. I spent a lot of time and energy trying to automate the process but the industry refuses to modernize.

>Lots of sending out letters and making phone calls.

Can you elaborate? Who are these letters to? What do they contain? What happens if someone doesn't pay after you serve notice? What's the whole process like?

Re: How to become a debt buyer

#72

Post by omginternets »

BobJS wrote: post #66
omginternets wrote: post #51

Earlier quoted context omitted.

Sure, but what are some of these "interesting mechanics" you referred to in your earlier post?

Did I say that? I don't recall writing that. It's just credit markets really. Not all that interesting. Most people just don't think about them.

Ok, I had you confused with the person who made the original comment, but you're not really answering the question...

Re: How to become a debt buyer

#73

Post by barryp »

lukev wrote: post #69
BobJS wrote: post #29

I wrote this article years ago. I can't believe it's on HN today. As someone who spent almost a decade trying to run as ethical an agency as possible, I realized that there's no room for people who want to operate the right way. I could go on for days about all of the crazy stuff I saw while I was involved but leaving the debt industry was the best decision I ever made. Terrible industry, terrible people.

This is a question I've always had about the debt industry... How hard would it be for consumers (or through a proxy) to seek out and buy their own debt? You mention in another comment that medical debt (for example) could go for pennies on the dollar. If I'm hundreds of thousands of dollars in medical debt (as many people are), it seems like this would be well worth the effort. Is it possible to locate a particular…

I thing orgs like that already exist, see: https://ripmedicaldebt.org/ and https://www.cbsnews.com/news/rip-medical-debt-forgiving-medi...

Re: How to become a debt buyer

#74

Post by zoklet-enjoyer »

BobJS wrote: post #68
zoklet-enjoyer wrote: post #23

I want to buy my friends debt for cheap. What's the usual discount on this?

You can't buy individual debts. They come in large portfolios of thousands of accounts.

Ah, yeah I suppose people would buy their own debt if they could

Re: How to become a debt buyer

#75

Post by juliusdavies »

omginternets wrote: post #71
BobJS wrote: post #64

Earlier quoted context omitted.

Lots of sending out letters and making phone calls. I spent a lot of time and energy trying to automate the process but the industry refuses to modernize.

>Lots of sending out letters and making phone calls. Can you elaborate? Who are these letters to? What do they contain? What happens if someone doesn't pay after you serve notice? What's the whole process like?

If no letter has been sent about the debt in 2 or 3 years, the owner of the debt loses the right to collect the debt.

(I can’t remember exact duration- probably depends on jurisdiction).

Re: How to become a debt buyer

#76

Post by ChadNauseam »

alexb_ wrote: post #9

It's extremely unfortunate that a lot of our society has bundled together the ideas of "Unethical" and "Profitable" so much that people are attracted to evil industries taking advantage of the poor, because they think it will get them a lot of money. Can't wait until this shit is pushed onto a bunch of zoomers who are looking for the next way to get rich without doing any actual work.

I don't understand this perspective. Debt isn't just something we made up to punish the little guy. I like being able to borrow money and go into debt if I wanted to. It's not something I want to have to do, but it's an option I want to have available to me. Creditors would find it harder to get paid back without debt collectors, and so would be less willing to lend in their absence. Therefore, debt collectors directly benefit all creditors, especially ones with less collateral, by lowering their interest rates.

Re: How to become a debt buyer

#77

Post by mr_woozy »

lukev wrote: post #69
BobJS wrote: post #29

I wrote this article years ago. I can't believe it's on HN today. As someone who spent almost a decade trying to run as ethical an agency as possible, I realized that there's no room for people who want to operate the right way. I could go on for days about all of the crazy stuff I saw while I was involved but leaving the debt industry was the best decision I ever made. Terrible industry, terrible people.

This is a question I've always had about the debt industry... How hard would it be for consumers (or through a proxy) to seek out and buy their own debt? You mention in another comment that medical debt (for example) could go for pennies on the dollar. If I'm hundreds of thousands of dollars in medical debt (as many people are), it seems like this would be well worth the effort. Is it possible to locate a particular…

[dead]

Re: How to become a debt buyer

#78

Post by medvezhenok »

BobJS wrote: post #49
omginternets wrote: post #14

Earlier quoted context omitted.

>there's a lot of interesting stuff to learn from the mechanics of the debt collection business I'm intrigued. Can you elaborate?

It's a legitimate need, it's just a corrupted industry because of misaligned incentives. We need some form of debt collections otherwise credit couldn't exist. The problem is that regulations are absolutely inconsistent and don't incentivize people to operate ethically. It's a regulatory problem. An interesting fact is that a lot of agencies buy debt for about 1 cent on the dollar and liquidate around 2%. Collecting…

Presumably if the debt is liquidated at 2%, it doesn't make a material difference in offering credit, since it's pretty much a write-off for the credit-issuing institution anyway, right?

I'm not seeing how the debt collection in this case helps provide more credit for the economy - might as well just write off the non-performing debt altogether.

Re: How to become a debt buyer

#79

Post by medvezhenok »

traceroute66 wrote: post #3

Yeah, erm, no, just NO. Unless we're talking about A-grade corporate or government debt. Which isn't guaranteed, of course, but at least its a relatively sensible area to dabble in if you want to play the game. Anything else, whether "junk bonds" or any of the more "exotic" items listed in this blog post are the sort of thing you should not touch with the proverbial bargepole. Why ? Because there is a reason those so…

There are all sorts of esoteric debt markets (and claim markets).

Not too long ago, people were selling claims on FTX deposits (a sort of debt) for pennies on the dollar since they assumed the money was gone... now the estimated recovery rate might go as high as 30-50 cents on the dollar, so whoever bought that debt claim will make out like a bandit.

Re: How to become a debt buyer

#80

Post by medvezhenok »

zoklet-enjoyer wrote: post #74
BobJS wrote: post #68

Earlier quoted context omitted.

You can't buy individual debts. They come in large portfolios of thousands of accounts.

Ah, yeah I suppose people would buy their own debt if they could

I think there's not much point in purchasing your own debt as by that point the creditor has written it off anyway (and as someone said above - paying it off at that point will not do anything for your credit report, and the debt will fall off your history after 7 years either way).
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