The market for debt is rising this year, now that more Americans are trying to keep up with rising inflation rates. CNBC points out that the average U.S. household with debt owes around $155,622, which is up by 6.2% from last year. Out of all the different types of loans, mortgages, auto loans, and student loans made up the highest percentage of household debt over the past few years.

However, borrowers and investors can actually benefit from one another. So if you’re on the lookout for an investment opportunity or for a debt payment solution, here’s what you need to know about buying and selling debt:

Who’s qualified to sell their debt?

Both businesses and individual borrowers are allowed to sell their debts in this arrangement, as long as they fit in the collectability qualifications of their chosen platform.

For instance, the Kaiser Family Foundation discovered that a quarter of U.S. adults struggled with paying outstanding medical bills last year, causing patient debt to pile up in hospitals. Since not all of these medical loans can be written off through debt forgiveness, charitable organizations and debt purchasing agencies are now allowed to purchase patient debt from hospitals and other medical providers. This eases the burden on hospitals and care providers, allowing them to cover the costs of the unpaid medical expenses of previous patients.

Individuals can also sell personal debt, such as student loans. AskMoney publishes multiple guides on personal loans, and in one of these guides they note that some people struggle with student loans due to their high price and long repayment period. In fact, a survey revealed that 12% of student loan debtors have delayed having children due to the length of the repayment period. This makes it critical for student loan borrowers to have several options for paying off their debts, such as selling them.

How can investors profit from these debts?

This business setup is a good opportunity, and investors have been getting great returns in the past few years.

Debt buyers are usually companies or individuals who purchase these debts so that they can collect a higher debt payoff amount after a certain period of time. Some of the buyers are licensed collection agencies, while other buyers can simply outsource a licensed agency to collect these debts from individuals.

This setup can be profitable, as illustrated by data provider HFR that reported a 13.9% return from distressed debt in 2021. This is a significant ROI, given that the average hedge fund provided a 9.5% return in the same year.

How can you buy and/or sell debt?

If you’re interested in buying or selling debt, our article on ‘Where to Buy Debt Portfolios’ highlights that you can start by negotiating with banks and credit companies through debt purchasing marketplaces like Debt Catcher. Rather than doing cold calls to potential sellers or buyers, both parties simply need to register on the marketplace so that the debt portfolio can be posted and purchased from the platform. This way, both parties can get in contact with each other and handle the transaction without worrying about commissions.


Now is the perfect time to sell or invest in debt. To start, you can register yourself as a seller or a buyer through Debt Catcher. Sellers can put up classified ads for their debts, while buyers get to enjoy commission-free deals for their purchase — and both parties end up happy.