Disciplined buyers typically target a 12% to 20% net internal rate of return . How to Start a Debt Buying Business Model: Operator's Guide
Debt buying is one of the most heavily regulated sectors of finance. Underestimating this is a common reason for failure.
When lenders like banks or telecom companies cannot collect on debts (often after 120–180 days), they "charge off" the debt and sell it to recoup some losses.
Lenders bundle thousands of delinquent accounts (credit cards, medical bills, personal loans) into portfolios.