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lcamtuf :verified: :verified: :verified: /
npub17zq…g54v
2024-01-23 18:34:19

lcamtuf :verified: :verified: :verified: on Nostr: There is this story about NYC planning to "wipe out $2B in medical debt": ...

There is this story about NYC planning to "wipe out $2B in medical debt":

https://www.cbsnews.com/news/new-york-city-eric-adams-medical-debt/

They're doing this by purchasing this debt for $18M (less than 1% of nominal value). But this means they're not buying *good* debt for people who are making payments - or were ever likely to.

Much like John Oliver's stunt a while back, they're buying junk debt and essentially throwing away money. The only winner is a bottom-feeding collections agency who gets to offload some worthless leads.

The thing is, unpaid debt is a big deal for a while, but if the debtor can't be forced to pay for several years, it becomes nearly worthless. The statute of limitations for legal enforcement is around 3-6 years in most states. After that, the records get passed around from one ephemeral, bottom-feeding collections agency to another. The agencies occasionally send junk mail or try to make phone calls, hoping to find a sucker who'd make it worth their time. After a while, they give up.

So yes, you can buy that debt, but you're not making the world a whole lot better. You're spending more than the collection agencies were ever expecting to see.
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