Typically, banks, lenders, credit card issuers, or credit grantors charge-off the debt after an account has been delinquent for six (6) months or more. Delinquent debtors suffer financial instability due to a number of factors including divorce, unemployment, disability, medical problems, over spending, gambling, drugs or alcohol. After charge-off, credit grantors package their debt and sell it to resellers and end users. ARM has purchased directly from banks, credit unions, finance companies, and from nationally known resellers. Portfolios are segmented with debtors located throughout the United States, regionally or located in a particular state. Debt portfolios may be purchased in single lots or on a monthly forward flow basis.

"Purchased debt is classified by age as fresh, prime, secondary and tertiary. The prime debt share of the market is 40%, followed by fresh (33%), secondary (14%), and tertiary (13%). The older the debt, the lower the rate paid". Debt Purchasing - A Market Overview, September 24, 2002, 5th edition of the Kaulkin Report.

"The total distressed-debt market, from charge-offs to performing loans, soared from $26 billion in 1998 to $115 billion in 2001. The charge-off market alone jumped from $20 billion to $60 billion in the same period" (Collections & Credit Risk, October 2002, Volume 7/Number 10, page 45). "The volume of charged-off loans expected to be sold in the secondary market in 2003 is in the $75 billion range" (Collections & Credit Risk, June, 2003). Credit card and consumer debt have increased, in principal, due to consumers' spending habits and credit grantors' lowering of underwriting standards in order to increase market share and profit.