Suppose I have debt – student loans or something. So the bank and I have a contract that says I owe them $500.

From what I understand, the bank can sell the contracted debt to some other agency, and then assert that I owe that company the debt.

Can I as the debtor also sell (trade, or transfer) my debt to another person or agency? Is that legally viable?

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    Yes, this happens all the time. It's called "refinancing." – dwoz Sep 12 '15 at 2:29

The debtholder is the person or entity that is owed the money. When you owe someone or something money you are the debtor.

A debtholder holds the note or other instrument that identifies the terms of the debt. That note is an asset that, as you point out, can be traded on the market. The debtor owes the holder of the note according to its terms.

As a debtor you have no say, unless specified in the note, who can own that note.

One method of changing the holder of a debt would be to re-finance from another lender. Find a lender who is willing to lend you the money to pay off the current debt and then become a holder of the "new" debt. This assumes the current debt can be settled early; again, something that would be specified in the terms of the current debt.

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You owe A money.

Borrow money from B to pay A.

Now you owe B money.

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  • I exchange my privilege to owe $$$ to a X, without transferring funds to A. X now owes A. 0 funds transfer. – j0h Sep 11 '15 at 13:45
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    Might be a better question for money.stackexchange.com. The problem I see with your scenario is that it would be very hard for X to stop coming after you. You can tell them that it's A who owes the money now, but X's deal was with you. In order for your scheme to work you would need to get X to agree to it up front. But a lender would never do that because they have no way of knowing what deadbeat you'll sell to. Debt consolidation comes close but you are still the debtor. – jqning Sep 11 '15 at 14:49

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