Re:'It's crazy': Chase forgiving all debt owed by its Canada...
by froindt on Thursday August 08, 2019 @11:26PM
(#20651106)
A personal pet peeve of mine is misunderstandings of how taxes work. I'm not sure if you're misunderstanding, but I do want to clarify.
They can certainly take a deduction for some money they wouldn't be able to collect successfully. But they can deduct the entire balance now, rather than writing off small portions over the next so many years. Of course, they're simply not getting taxed on money they didn't earn (since it's a deduction, not a credit).
The mathematically optimal solution is certainly not to write everything off. They could have sold it to a debt collection company and made a larger profit.
Re:'It's crazy': Chase forgiving all debt owed by its Canada...
by lonelappde on Friday August 09, 2019 @12:08AM
(#20651272)
Why do you assume selling the debt would be profitable? It depends on the price.
Re:'It's crazy': Chase forgiving all debt owed by its Canada...
by Thorrez on Friday August 09, 2019 @12:36AM
(#20651368)
I think in this case "larger profit" doesn't mean profitable, it means "less magnitude of negative profit".
Re:'It's crazy': Chase forgiving all debt owed by its Canada...
by Scoundreller on Thursday August 08, 2019 @10:10PM
(#20650774)
I guess the moral of the story is: reject the first offer and see if they'll come back for more or not, because running any tabulations.
Re:'It's crazy': Chase forgiving all debt owed by its Canada...
by cryptica on Friday August 09, 2019 @04:59AM
(#20652481)
It's concerning because ultimately that money came out of the bank's profits.
The profits where derived from interest on loans which were paid off by responsible individuals.
This seems like part of a global trend of individuals being rewarded for being economic parasites.
If they write off this debt, they probably also get to claim a deduction somewhere on money that they would never be able to collect.
(At one point, one of these ilk of companies offered my grandfather the "privilege" of taking a lump sum settlement for his black lung payments. I calculated what principal I expected they needed to reserve to provide his payments, discounted it slightly and hoped that they wanted rid of the accounting and maintenance in order to give him the lump sum. Alas, they weren't desperate enough to get him off the books and we never heard from them again.)