Buy your own debt?

Here is the theory...

You have a credit card that has been maxed out and you haven’t paid the bill in 24 months and now it’s in collections.  The balance on that bad debt is $5,000.  So the credit card company can't collect their money because you don't have the money to pay them.  So they decide to sell your bad debt to someone else.  That means that the original lender has sold your debt to an agency for lets say twenty cents on the dollar or $2,000.  So now a new company is calling you to try to get you to pay them $5,000.00.  But you still don’t have the money to pay...

So you decide you want to open your own company that deals in buying debt and collecting on it.  So you go through all the red tape and start your company.  You then contact the collection agency that now owns your debt and you offer to buy it from them for twenty five cents on the dollar or $2,500.  They say ok they sell your bad debt to your company (p.s. they don’t know that it’s you buying it).  So now you officially own your own debt!  SO WHAT!  You still paid $2,500 for it so what’s the point.

OK follow along closely!

The original creditor issued you the $5,000 line of credit you used all $5,000 and didn't pay them back.  The creditor then reports you to the credit bureau and lowers your score. 

Then after some time of trying to collect the money they give up and sell your bad debt to a collection agency for twenty cents on the dollar or $2,000.  So now the original creditor reports to the credit bureau that you don’t owe them money.  Why?  Because now it’s the Collection Agency’s.... it’s now their job to report to the credit bureau that you owe them the money now.  So the Collection Agency starts reporting that you owe them the $5,000.  AND YOUR CREDIT SCORE STILL SUCKS!

Now you start your own company, you call the collection agency and tell them that you want to by "your debt" (not telling them that its you buying it) under the company’s name.  They agree to sell it to your company for twenty five cents on the dollar.  So you send the collection agency a company check for $2,500.  The collection agency then reports to the credit bureau that they no longer have your debt and it comes off of your credit.  Then it becomes your companies’ responsibility to report your own debt to the credit bureau..... SO YOU DON'T and your SCORE GOES UP and that $5,000 BAD DEBT is GONE!!

 

A theory that could work if you could buy one specific individual debt!!!

I love  your thought theology but your last sentence says it all. Debt sellers don't sell individual debts as you probably already know. The debt collection agency won't sell one single account either. BTW, they probably paid five to seven cents on the dollar and not the twenty you mentioned. How do I know? This is the kind of information you find in Collections & Credit Risk Magazine. Look it up on the Internet and read their articles. Interesting stuff to say the least.

Would it be legal to purchase your own debt or not?