About six years ago, one could buy debt that had been discharged in bankruptcy for less than five cents on the dollar. Why has the price increased to seven cents on the dollar?

When a bankruptcy judge discharges certain debts, they are no longer supposed to appear on debtors’ credit reports. Nonetheless, many credit-card companies and other creditors have been keeping debts active even after they have been discharged in bankruptcy. Not surprisingly, some aggressive entrepreneurs have found a way to profit from this practice. Companies with names such as eCast Settlement and Max Recovery purchase discharged debt obligations at pennies on the dollar. Then they pursue the debtors and pressure them to pay the debts even though they have been discharged. Some of these companies have been successful enough to become publicly traded on the New York Stock Exchange.