Watch John Oliver's Epic Takedown of Debt Buyers

Recently the thought provoking HBO show “Last Week Tonight with John Oliver” delved into the world of Debt Buyers.  A key point made early on is that many people find themselves in debt due to no fault of their own.  I see this every day when talking with individuals about their specific circumstances.  No matter what you do there are just some debts that are completely unavoidable. Here’s the video:

Then you have the debt buying industry.  I hear horror stories from clients about collection calls that turn nasty and emails threatening their immediate arrest, by the sheriff more often than not.  The problem with the debt buying companies is that they have nothing to lose but a lot to gain.  As explained by John Oliver, the original creditor can write off a $1,000 debt for its tax purposes and can then turn around and sell this debt for $50 to the debt buying company.  The new owner can then attempt to collect the $1,000 owed; making a nice profit for itself.

I See This All The Time!

When meeting with clients it is not uncommon to come across a debt showing up on their credit report that is unfamiliar to them or finding out about a lawsuit that was filed by a plaintiff the client has no familiarity.  The other issue with these lawsuits is that the majority of complaints are never answered by the defendants.  This leads to default judgments for money that might be too old to legally collect.  Without fighting the complaint the debt buyers get an automatic victory.  And with a valid judgment they have the right to collect their money directly through wage garnishments and bank attachments.

As John Oliver always does, he took a sensible approach to this major issuing and started “Central Assets Recovery Professionals Inc.” (CARP), purchased a portfolio of nearly $15 million of out of statute medical debt from Texas at a cost of half a cent on the dollar ($0.005), and then forgave this debt.  Truly amazing!