Debt Ownership

[bagelwoof]

It's clear that debtor accounts are transferrable or assignable, and are sold all the time. I can find dozens of clearing houses for actionable debts with just a few words dropped into Google...

Are there any restrictions on who can own a debt?

Can a person purchase their own debt accounts on the open market? I'm not asking about the practical aspects of purchasing the debt. Is it legal for a person to purchase their own delinquent account?

If not, why not?

 

[Theresagail]

No, The company that owns the debt is the one that will release (sale) it to a Collection agency -- Collections Agencies must be insured, Bonded and have a licence in the state to do collections---

 

[bagelwoof]

On the other hand, I can purchase debts (since they're a transferrable instrument) and pay a collections agent to collect the debt for me. If I were to purchase JoeBob Achinback's debt as a part of a lot sale of junk debts, do I have to collect or sue, or can the instrument be transferred to JoeBob for consideration that's in line with market rate for that class of debt?

Current practice is certainly to try to collect because the investment in the instrument is often small, though the collections overhead is often much larger...

 

[unclemoon]

I want to understand your question.

It sounds like you may be considering a bulk purchase of bad debt, and rather than properly organizing a collection agency to collect the past due funds, you intend to contact the debtor and propose "selling" them their own debt for somewhere between what you paid for it, and its face value.

Is this correct?