Hacker News Reader

Comment by rdl | Hacker News Reader

It would be cool if someone created something like prosper, where I could see bad debt from people, and they could make pitches for why I should extinguish theirs. For $x, I could purchase and extinguish N x $x in debt, where N is some function of type, time to maturity, etc.

I personally would be more likely to buy deserving-seeming medical, failed business, etc. debt than car notes or whatever, but maybe others would have their own preferences.

View on HN

So people list their bad debts on a website and compete for the most compelling sob story to get them written off.

I actually cannot imagine how this would lead to better outsomes than just buying and forgiving debt blindly. You would preference the best and boldest liars over people who can't bring themselves to debase themselves in front of the world in hopes of your patronage.

Buying blind at least solves the adverse selection problem.

I would not mind buying and forgiving someone's debt blindly. I've been in situations where $2000 debt destroyed my ability to survive independently. While now I could pay off 2K instantly without even feeling it. How lovely it would be to relieve someone of that burden!

When you invest in debt via peer to per lenders like Prosper and Lending Club you aren't actually buying the persons debt you are purchasing a registered security from the respective p2p company who is the actual holder of the debt.

The security is structured in such a way that only the p2p company has the right to collect on the debt should the debtor default.

Yeah, that's why I stopped using them -- their collection agencies were horrible.

As a former prosper lender - that's basically what it is.

Reply on news.ycombinator.com