Credit card debt sold off ?

[andy158]

I noticed many of the cc's I filed on have sold {transfered} the balances to other companies such as Ecast Settlemant Corporation and Portfolio Recovery Associates. Is this normal? Is this the bank's way of getting the debt off their books? I have several bk court motions where certain banks have done this. I know this is a common practice in a regular loan type deal. In fact the student loans I had years ago were sold four times. I wasn't aware banks could sell off these "bad" accounts to others while they are being claimed in bk.

[JustFileSuit]

Portfolio Recovery Associates

This outfit is a buyer of stale paper, eg cc debt that is in default, and buys it "in bulk" by thousands of accounts in one basket, for typically 6 cents on the dollar. They then try to collect what they can, mostly by squeezing the debtors. PRA operates out of the Norfok/Portsmouth area. If you are in the USBC then they cannot contact you, and typically the just write off those items out of the basket they have bought. You may see a Proof of Claim filed. And yes, apparently creditors can sell their position of claim that they have before the USBC; they are known to do it without Motion on the theory that substituting the creditor is no material change in the position of the Debtor. Whether or not that is true in the case where you have cross-claims or offset claims against the creditor is not clear (at least not clear to me). Personally, any creditor that sold their claim and against where I had a cross-claim or offset claim, I would pursue the offset against the new creditor.

Yes, the bank or cc outfit gets the stale loan off their books by selling it and taking the loss. The recovery they have is the amount the sold it for; the difference is a tax deduction to the creditor, so they have an incentive to do it and realize the loss before the end of their tax year.

[kornellred]

There are hucksters now selling "courses" on how to get rich buying bad debt - can you believe it? This apparently has become standard operating procedure for most big lenders - selling the bad debt for pennies on the dollar.
If you can buy a $10,000 bad debt from a bank for $600, you now legally "own" the debt and can demand that the debtor pay you the full amount. In 99.999% of cases, that ain't gonna happen. However, since the 2005 BAPCPA laws were enacted, far fewer debtors can escape the debt entirely by filing Chapter 7. Which means that Chapter 13 filers will have their payments disbursed among the debt buyers, whoever they are.

A certain amount of recovery is assured - but 3 to 5 years is a long time to wait for a return on such an investment.

I know - this has little to do with the posting - but it does reveal that the debt buying and selling game is hot and definitely in full swing.

[JustFileSuit]

[QUOTE=kornellred;364012]

If you can buy a $10,000 bad debt from a bank for $600, you now legally "own" the debt and can demand that the debtor pay you the full amount.

So the Goldman Sachs outfits of the world can now go buy up bad debt in bulk, securitize it, sell "traches" of the securities to so-called "investors " (really, bottom-feeders), then sell the operating interests to a wholesale buyer, who in turn takes a management fee for doing the collecting. And, it is all made possible by your taxpayer funding of the bankers, and your compliant Congress. Just lovely.

Which means that Chapter 13 filers will have their payments disbursed among the debt buyers, whoever they are.

Hedge funds who buy tranches of the securities, and located in Greenwich, CT.


Note that self-proclaimed Guru HHM has hit me with a 2-point infraction penalty, apparently not liking my posts on self-help here in this forum, so since I am thin-skinned I now leave this Forum and I wish you folks the best of luck in struggling with your adversaries. I have been at it for over 40 years and with consistent success. It does involve persistence, so my last advice is: stick with it. You only have to outlast your adversary by one day. And then, you can Just File Suit!

[justbroke]

JustFileSuit, if you are an attorney or have other bonafides, then lay them on the tables. I believe that HHM is basically saying put up or shut up. This forum has been rather successful taking the more conservative view in most cases. I say most cases, because we do push the envelope on areas where there is consensus that issues abound (like "who holds the note", but not "QC" the deed).