Why Would A Creditor Accept A Discounted Payoff?
It's simple. Think of it this way. You lend your friend Bob $100 and he hasn't payed you any of it back for a year. You find out he is moving to Brazil and you attend his going away party. At the party he offers to give you $50 if you honer his loan as satisfied in full. What would you do? Should you take it, or would you rather set up an arrangement of $5 per month until it is paid off? Do you really feel like continuously tracking him down in another country to collect and remind him to make payments? The answer is simple, take the 50 bucks and call it a day. You can do things with that 50 bucks and have it earn money in a number of different avenues. It's the same idea with your unsecured creditor.
