People and organizations (even banks) and governments erase debt all the time. Sometimes it's from kindness, sometimes for PR, usually because they're unable to collect it. You can't really tell the difference among the cases.
The whole monetary system is a joke, no not that it's evil, just that our (and govt.) attitude to it is so medieval.
I assume you can’t actually buy your own debt, only buy debts in aggregate. How can a creditor have any moral claim to $1 when the note traded for 4¢?
Does this give me an incentive to purposefully wait until the debt collectors show up, and then offer them 5¢?