John Oliver on Debt Collectors

[ryoder 1,590]

https://www.youtube.com/watch?v=hxUAntt1z2c

The punchline at the end is the best feel-good story I've heard in years: Using the leverage of the debt trading/collecting industry, they erased $15M of consumers medical debt, and it cost them only $60K to do it.

Imagine what a very wealthy benefactor could do with millions of dollars...and at the same time deprive the debt industry of its feedstock. I'm wondering whether the IRS would permit a tax deduction over the actual cost of acquiring the debt.

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[DougH 270]

No your cost basis in the debt will be the amount you paid for it, so when you discharge all of it you only end up with a deduction equal to that amount.

"The restraining order says you're only allowed to touch me in freefall"
=P

[ryoder 1,590]

I suspected that would be the case.

Here is a funny YouTube comment:

What happens if someone takes out a massive loan, to found a debt-buying company, to buy their own debt, to have it forgiven? There's a way to cheat the system.

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[DougH 270]

If you are in the position to get debt financing to buy your own debt, your debt wouldn't be on the market, and visa versa lol.

I made an offer years ago to buy out my student loan when the loan holder was in chapter 7 bankruptcy.

I figured I would be able to purchase the claim for penny's on the dollar, and that cash in had would be an attractive offer to the bankruptcy court.

Nope, no dice. I paid my loans on time, had good credit, so my loans were attractive, and weren't available for me to buy back.

"The restraining order says you're only allowed to touch me in freefall"
=P

[ryoder 1,590]

Damn.
That would have been a good idea.

Soon after I got out out of school, I traded in the rusty old 11yo Jeep I'd been driving on a new one. I paid it off ASAP. About a year later, interest rates moved into the position where my school loans had a higher interest rate than used-car loans. So I went to the bank (where the auto loan had been), explained my situation, and they gave me new loan on the Jeep, which I used to pay off the school loans.

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.