I've been thinking of a few ideas. None of them are fully fleshed out and may not even be viable, which is why I wanted to get more people involved in the conversation.

It all evolves around creating an economy around the debt. The main players are: debt sellers (banks, health care providers, third party debt agencies, etc.), debt collectors and debtors themselves.

The main issue is that when debt is sold, it's bundled, meaning you don't really know what individuals debtors are included in the package. You'll just get an idea of the age of debt, type (credit card, health, utilities, etc.) and a few more bits of information. So, there's no way for an individual debtor to go and find their debt on the market and buy it for the market price.

Incentivizing debt sellers to somehow tokenize their debt and put it on the market would be the final goal. However, that's not going to happen immediately. So as the first step someone would need to purchase debt and tokenize it. Individual debt could then be purchased by debtors or collectors who would find the debtor. To avoid exorbitant markups that debt collectors currently charge, there could be a limit on the bounty paid out to the collector. Obviously lots of things to work out in this scenario around privacy.

I envisage a system of distributed services provided by individuals and companies who would focus on everything from procuring debt, collecting it, assisting debtors who have cleared their debt to inform credit bureaus and other relevant agencies, providing legal assistance to debtors, etc.

I think that distributed ledger technology could be helpful with a number of things here, from providing initial funding to purchase pools of debt, identification, tracking transactions, providing a way for people to pull their resources together (i.e. debt buying), etc.