When I was a little girl, my dad worked for a time for a small company. He apparently talked the owner into letting him take over the dead accounts as part of his duties on the condition that he get a cut. The owner expected them to be uncollectable, so he figured there was nothing to lose.
My dad would go personally see these people, learn where they lived, learn what day of the month they got their check (often, a welfare check). On that day, he would show up with enough money to cash their check and take out a small payment on the debt they owed. (He swore that if you went even one day later, you weren't going to get a dime.) He was very friendly about it and offered to cash it for their "convenience". He made it an offer they could not refuse.
My dad supposedly collected on upwards of 90% of what the business was owed by these dead accounts, taking his cut, of course.
There's a lot of money in businesses in which you're helping companies "find money". In this case, it's recovering at least something from a bad debt. In others, it could be finding buyers for scrap product or other material that's usually just thrown away. The sellers aren't price sensitive, and unless there's a very competitive secondary market, you can get away with high margins.
Disappointing. Didn't live up to its promises of exposing aspects of the business which could only be gleaned by "going into the belly of the beast." The author might not be granted much literary license on most projects, but he sure took it here. (As much in the flowery prose as in the broken promise.)
It's more that these are ways to make money fast if you're desperate. Plasma donation is usually something people do to get paid, which is why plasma centers are usually in poor neighborhoods.
I never have really understood why debtors often seem to have no legal obligation to pay their debts. I mean, a system where all the lender can do is call and say 'please pay us'? That makes no sense.
Because the punitive response to default makes even less sense. It doesn't extract much money (most structured BK's fail). It retards entrepreneurship (most new companies fail). It locks debtors into unproductive careers or businesses, which is a net loss for the economy. And, it actually encourages irresponsible lending (greater disincentives to default imply more incentives to lend).
What makes no sense at all is the system of incentives that, over the last 10-15 years, motivated financial institutions to go out of their way to extend credit to people with no discernable way to pay it off. Those incentives had almost nothing to do with consumer responsibility. They appear instead to have been a byproduct of the deliberate mispricing of debt.
> Because the punitive response to default makes even less sense.
I always thought that banks don't care for punishing people per-se, as morality it not their business. It seems they just have an excuse to create some bogus losses to offset their gains on paper? Does that makes sense? In other words, they know that some of these debtors will never pay back so they start charging a high (say 35%) interest. All that accumulated "loss" can be written off against their gains for tax purposes.
Does that make any sense or am I completely wrong?
When I was a little girl, my dad worked for a time for a small company. He apparently talked the owner into letting him take over the dead accounts as part of his duties on the condition that he get a cut. The owner expected them to be uncollectable, so he figured there was nothing to lose.
My dad would go personally see these people, learn where they lived, learn what day of the month they got their check (often, a welfare check). On that day, he would show up with enough money to cash their check and take out a small payment on the debt they owed. (He swore that if you went even one day later, you weren't going to get a dime.) He was very friendly about it and offered to cash it for their "convenience". He made it an offer they could not refuse.
My dad supposedly collected on upwards of 90% of what the business was owed by these dead accounts, taking his cut, of course.