Debt Buyer

Student loans, mortgage loans, credit card loans, auto loans...debt of all kinds has become part of the fabric of American life. Not everyone is Peter Parker, who can get a genius subsidization grant from Tony Stark as long as he moonlights as Spider-Man.

Pundits estimate that some 40% of unpaid student loans alone will default by the mid 2020s. Loans that miss multiple payments or go into default may be sold to debt buyers at pennies on the dollar. The original lender gets a tax write-off for the loss on the loan, and the debt buyer then makes their profit by trying to collect on as large a portion of the outstanding debt as possible.

Debt buyers may threaten lawsuits; they might offer varying 75% payment in full settlement in a lump sum or modified repayment terms on a monthly basis. Debt buying is a multi-million dollar business, and there are numerous participants, ranging from law firms to small private companies or large public companies. If you can buy a bond at 30 cents on the dollar and it continues to pay its 5% interest...and goes back to par...you've made a gentle killing. In a good way.