meaning, how do they get paid? Do they write it off? Can some1 give me details?
Say I owe JCPenny $2000.00, and I never pay them. Do they write it off and get paid? Or do they take a big loss?
How much is the credit collectors likely to pay for it?
Starting Score: 620
thats not what I maan, sorry, if my question wasnt clear.
Im tryin to see how are the credit companies protecting themselves from loss. Are they insured. And by how much.
Say for instance im Sears. I sell the debt for peanuts. Do I get some protection as Sears, for the debt I just sold? Can I write it off.
Profits and losses works the same for most businesses.
Ok let's says you are Sears.You have a $-1000 debt someone didnt pay,you sell it for +$50, now you have -$950.
You can get a tax break for writing off the $950 because you didnt have that income to being with.
The tax break gave you +$50, so now you have -$900.
You have to make up $900 somewhere, so you raise your store prices to new customers.
So your new customers will have to pay the for what they lost from a CC customer that didnt pay.
Another example.
same with shoplifting, the company raises prices to make up the for the loss from the shoplifters.
This is the way I understand it works, 
thanks, gotcha. i always thought they were able to write off the loss somehow and got back the money some through some legal or tax tactic, to get most of there money back. Some type of insurance.
but that clears it up thanks.