LogFAQs > #979203044

ROBANN_88 posted...

i do not understand how that works at all, but good on him

Which part? Making the company, or buying up the debt?

As far as making the company, it's just a matter of picking a name and filing the Inc.

As far as buying up the debt, there are hospitals and insurance companies that "sell" their debt to these companies. Basically, they have 100 "customers" that own them X amount of dollars that they just aren't paying. Instead of ragging these 100 people over and over, they "sell" the debt to a collection company for fractions of what is owed. They would rather get some of the money back than continue to hound people for money they know they'll never get.

So then the collection company does the hounding. They bought $10k in debt for $2k. They'll then call the individual and say "Hey, instead of owing the insurance company 10 grand, you now only owe us $4k." Individual is happy becasue they owe $6k less than before. Collection company is happy becasue they made $2k in profit, and the insurance company is happy because they have $2k that they felt they were never going to get from the original customer.

John Oliver did this, but instead of buying up the debt for the sake of collecting less from the end customer, he just told the end customer they don't owe anything anymore.