Posted by John on August 19, 2003 at 16:06:02:
Very simple to make money on these. Like Mr C said, buy low sell high, but the rate is usually buy at 18%-25% and try to collect by offering to settle with the debtor at 40%. Remember, that’s at least a 62% gross profit. You take the risk of not being able to collect on some, but you still make out in the long run. You just have to be a better (meaner?) collector than the original note owner. There are actually secondary and tertiary (buy at 10%, recover 20-25%) markets for these notes. It’s very common with unsecured debt (credit cards).