At the same time they will ‘sell’ the debt to a debt collector for pennies on the dollar. The debt collector then will try to assert they have the right to collect on the debt.

However, this argument becomes dubious because there was a tax benefit given to the initial company. This is something worth being aware of. See legal counsel if you have questions or are unsure how to proceed.

People underestimate the basics sometimes. When people invest in stocks that have no solid fundamentals they really are gambling!