Book Review – Bad Paper

Bad Paper: Chasing Debt from Wall Street to the Underworld by Jake Halpern
My rating: 4 of 5 stars

I had been listening to This American Life recently, and the name of the show was "Magic Words". The theme of the show was how sometimes there are certain words that are said or mentioned that have unintended consequences. Jake Halpern was interviewed during the show; he told his story of interviewing a couple when they were in small claims court in Georgia (which is discussed in the final chapter of his book). It was fascinating to listen to him tell this story, as he essentially asked the owner of a small debt to "prove it"... prove that what these people owe is actually what they owe. The lawyer in turn puffed out his chest and acted sporadic, but when they went in front of the judge, the lawyer backed down.. because Halpern essentially said "the magic words" (which is the phrase he uses in the book as well.

In college, I was a little reckless with my personal finances, got in a little trouble, and found myself on the receiving end of collection calls. It was, unsurprisingly, an unpleasant experience. I think that's why hearing Halpern on the radio show was so invigorating. "Yes!", I screamed to myself, "Give it to the bad guy!"

Ironically, the lawyer is far from the "bad guy" in this book, which helps explain why this book was so interesting. The first half of the book is dedicated to discussing 2 main characters, an owner of debt (Aaron), and the gentleman he purchases this debt off of (Brandon). You see why they got into the business of purchasing paper (debt), how it can be so profitable, and how it can be such a disaster.

As the book moves on, you start to read interviews with other debtor's, debtee's, and collectors, and see how crazy the industry is. It's scary to know that if you default on a loan, who has access to your private information and how hard it can be to truly rectify a debt.

And so "who" is the bad guy in all of this? It depends on the viewpoint, but it's hard to argue it's not the financier's of this whole industry. Halpern paints a pretty strong picture that some in the world worship at the altar of money, and have no problems (even find some joy) in padding their pocketbooks with the debt's and hardships of others.

It's an interesting read, and an easy one at that.

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