I had a similar thought. It's equivalent to buying the bond that represents the debt you owe. Larger debt ends up in negotiations over the amount owed. War d

I had a similar thought. It's equivalent to buying the bond that represents the debt you owe. Larger debt ends up in negotiations over the amount owed. War debt after WW1 resulted in greatly reduced repayments based on the original lending. If you are a default risk on debt that has weak collateral, you could probably come to some agreement that pays back some fraction of the principal.