One thing that should be noted: if the debt is forgiven, the IRS counts it as income for tax purposes. As such, if you buy $5,000 worth of debt for $150 and forgive the debt, that $5,000 generally gets added onto their gross income.
Taxes are complicated enough that I wouldn't presume to say that this applies in all or most cases, but it's something to be aware of. I was only aware of it due to a USA Today article a while back mentioning it (http://www.usatoday.com/money/perfi/taxes/story/2012-03-02/i...). It's something to think about if you're interested in this topic.
http://en.wikipedia.org/wiki/Cancellation_of_Debt_(COD)_Inco...
Taxes are complicated enough that I wouldn't presume to say that this applies in all or most cases, but it's something to be aware of. I was only aware of it due to a USA Today article a while back mentioning it (http://www.usatoday.com/money/perfi/taxes/story/2012-03-02/i...). It's something to think about if you're interested in this topic.