That's because these charities wait until you default on the debt, go to collections, collections finds it so hopeless that they'll collect that they sell it to

That's because these charities wait until you default on the debt, go to collections, collections finds it so hopeless that they'll collect that they sell it to another collection agency, on and on, until it's bundled as the absolute cheapest debt you can buy, at less than a penny on the dollar. The only folks buying these junk debt bundles are hoping maybe 1 out of 100 of the debts are worth going after. Then the charity takes a look at buying up the cheapest bundle and forgiving it. $11 billion of bundles could have cost the charity $11 million total. There is a floor to the consequences on the customer, which is pretty much hit the moment it goes to collections (unless you have enough assets to make a lawsuit worthwhile). After that it's so far in the rearview mirror they probably don't even discover it happened. I wouldn't be surprised if collections agencies are the main supporters of debt forgiveness charities. Just another income stream for them.