Also: Everyone (including myself) has been talking about unsecured debt, but it may be worth mentioning secured debt as well. I once had an interest in buying real estate notes (mortgages, essentially). It turns out these are bought and sold for some percentage of face value all the time. The amount of the discount depends on the status of the mortgage payments, the balance of the loan, and the reason for the seller looking to unload it. When buying notes, there are multiple exit strategies but the most profitable one is often to work with the home owner to restructure payments in order to "rehabilitate" the loan. Meaning, the owner gets to stay in their house, possibly with a more favorable payment, and the investor gets to keep a performing note, or sell it to a more conservative investor.