Debt is priced based on the debtor's expected ability to repay. If you have the means to purchase your own debt, it's probably selling at very close to its face value.
I stopped paying my mortgage and walked away from the property. 2 years later, I called Bank Of America and negotiated to pay $2K to settle the debt. They accepted and my credit report is as if I never owned the home and walked away.
You can indeed buy your own debt at a steep discount. Its up to you to convince the debtor at how hard it will be to collect.
Disclaimer: I live in a judicial foreclosure state; it costs a substantial amount to perform foreclosures in my state, and also costs the bank to maintain the property between foreclosure and sale. Also, all of my assets were in retirement accounts, effectively judgement-proof.
I was essentially fucked. I threw my hands up and said I quit. Worked out for the best.
Of course, living in a non-recourse state is probably the best move, as you can't be held liable (your real estate secures your mortgage).
[1] http://finance.zacks.com/retirement-account-judgment-proof-5...
Somewhat offtopic: This is why I always recommend people use a Roth IRA as a savings vehicle vs a savings account. Not only can you withdraw the contributions at any time, but its shielded from creditors. Your ability to use a Roth IRA is, of course, subject to income limitations.
If you have the means to purchase your own debt at its face value, its probably selling at very close to its face value.
But the market value of your debt should be approximately (the amount the pricing algorithms expect you to be able to pay) minus (the amount the pricing algorithms expect to be expended in extracting payment from you).
So, IOW, for the average debtor (assuming that the algorithms involved are correct on average), the market price of their debt should be significantly less than they are able to pay.
If the market price of consumer debt was, on average, lower than its face value, nobody would make loans to consumers.
So the time sequence here is:
time 0 = Creditor A thinks that lending $10,000 to debtor B will create an asset worth $20,000
time 1 = Horrible things happen.
time 2 = Creditor A thinks that the asset thought to be worth $20,000 at time 0 is now worth only $100.
It is possible -- though perhaps not likely -- for it to be the case that the average value of all loans made at time 0 to be worth less than their face value at time 0, now that we are at time 2. That doesn't mean that consumer lending at time 2 would become impossible -- it means that lenders would set rates and choose debtors such that they think that new loans have values exceeding their costs.
It'll absolutely kill your credit score, but its an option.