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When an organization writes off a debt, it often sells the debt to a collector. Depending on the age of the debt, the collector might pay as much as 12 cents for each greenback owed, or as little as a fraction of a penny [source: Weston]. What’s the point of this transaction? It enables the corporate promoting the debt to not take a total loss. If Jane defaulted on a $one hundred debt, promoting the debt at 12 cents per dollar lets the corporate turn it into an $88 loss, thereby recovering $12.
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