Banks sell debt because they don't think that they will get the payment. Usually the debts are sold for pennies on the dollar. Generally speaking I don't think debt collectors think they will get anything from most debts since people that haven't paid their debts are either bankrupt, no longer living or they really have no possible way of ever paying it. But every once in a while they can coerce someone into paying all of what they owe and that is how they make money. Sometimes they can even get family members to pay someone elses debt- so even if that person has passed on, or filed for bankruptcy, sometimes a relative will still pick up the tab.

Discount rates are variable. Debts where the debt collector is likely to get money will sell for more then debts from a bankrupt person- who technically speaking wouldn't be able to pay anything- though sometimes debt collectors can get them to pay some amount.

Typically debt sells for between 3 to 16 cents on the dollar. So if debt collectors can get you to pay 50% of what you owe, they've made a pretty good profit. But like most things, it's hit and miss.
Source(s):
CreditAndCollectionsWorld.com

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