Question Buying and Selling Bankruptcy Claims

[IFCIntern]

Hey guys,

I was just wondering if someone wanted to buy or sell bankruptcy claims. Or Even if you know someone who does...

I am doing some research, and I was wondering what makes people buy and sell bankruptcy claims. Let me know! Thanks =)

[AngelinaCat]

Pardon me, but what on earth are you talking about?

[frogger]

Pardon me, but what on earth are you talking about?

Everything is for sale my dear, even the proofs of claims that have been filed for bankruptcy. Nothing more than purchasing them and updating them with the new court as to whom the new payee is to be.

Looks like someone is soliciting for business perhaps?

[frogger]

I was wondering what makes people buy and sell bankruptcy claims. )

Someone looking to make a dollar. It's pretty simple math. If you get them cheap enough, you may occasionally pick up a silk purse to along with the sow's ears........

[IFCIntern]

Yeah, but it doesn't make sense. I am so new to the whole idea of selling and purchasing claims.

[IFCIntern]

Why sell the claim, doesn't the seller lose money?
And what can someone buying the claim do with it? I mean it seems pretty useless to buy of all things a bankruptcy claim....

[frogger]

Why sell the claim, doesn't the seller lose money?
And what can someone buying the claim do with it? I mean it seems pretty useless to buy of all things a bankruptcy claim....

The big answer to that is: "It Depends".

There are so many chapter 13 cases that are 0% payout to the creditors, so many chapter 13 cases that dismiss, so therefore, so much of the paperwork is worthless.

If you (as a seller) can get "something" for the paper now, then perhaps that is better than never receiving anything at all and having to keep up with it (which is no problem) for 3 - 5 years.

Somewhere, somehow, someone has come up with a "magic" formula for buying the paper. It's not a game that I am willing to play.

[jst4f]

I did a Google search and yes there are people who buy or broker BK claims. There are also people and companies that buy discharged debt for pennies on the dollar and try to collect. Not me!!

[frogger]

I did a Google search and yes there are people who buy or broker BK claims. There are also people and companies that buy discharged debt for pennies on the dollar and try to collect. Not me!!

"Pennies on the dollar" is way too high for discharged debt! You can buy "charged off" credit card debt for anywhere from 3.2 to 5.4 cents on the dollar and that at least has some potential. (So don't worry about them not making money when settling with you for 20 cents on the dollar).

Attempting to collect discharged debt is sheer folly. The term "Fly by Night" comes to mind.......

[IFCIntern]

My mind is so boggled by this, I have been reading up this for the last 2 hours and it still doesn't make sense to me. It amazes me that in the last 3 years of college I didn't learn or even know about this. -___-

[kornellred]

Hmmm....I wonder if a debtor can buy the claims from his or her own Chapter 13 and thereby become the payee. Of course, your unsecured payback would have to be low enough for the claim holder of record to actually be motivated to sell it to you....

[ValleYum]

There may be $$ to make in buying Chapter 11 claims- particularly if it was a claim earning you a spot on the creditors committee. Just thinking out loud...