Excerpt from Bad Paper by Jake Halpern, plus links to reviews, author biography & more

Eventually, Aaron hired a floor manager—a young, handsome guy in his mid-twenties, who asked to be identified by his middle name, Rob. Rob understood collectors. He took it as a given, for example, that many of his collectors either used or sold drugs. In one of his stints as a manager, Rob bought his team "three cases of whippets"—steel cartridges filled with nitrous oxide—for hitting their goal. "You have to have a little hustle in you to collect," he explained. "Certainly, if you are selling bags of pot to college kids, you have that natural ability." One day, Rob had to help break up a fight that began when a collector overcharged his co-worker for a bag of cocaine. Their punishment, recalls Rob, was simply being sent home for the day. Above all, says Rob, the collectors needed "someone they could relate to"—someone who could be a "bridge" to Aaron. "I was that bridge."

Rob's biggest challenge was making sure that one of the agency's best collectors made it to work each day. On many occasions, Rob confiscated his car keys and insisted that he spend the night with Rob at his house. "He was a very intelligent guy, but he was also your average stoner who didn't think of the day ahead until that morning," recalled Rob. "He was extremely lazy and smoked a massive amount of pot. At the time, he was twenty-three and he didn't understand the whole concept of work responsibility." When he did show up, however, he was masterful at the "talk-off"—the spiel given to debtors in order to encourage, shame, and intimidate them into paying. This particular collector was a "killer" and a "beast" on the phone, Rob said.

To this day, Rob recalls his talk-off with great admiration: "He would ask a question, which he knew the answer to, but when he got the debtor's response, he flipped it on them. For example, maybe the debtor bought a dishwasher for a thousand dollars from Sears. The debtor would say, 'I didn't have a job at the time.' Then he would say, 'But I have paperwork right here saying that you worked at Rich Stadium at the time, and now I would like a statement from you because I am going to have to explain to the banks that you were lying.' He'd get them into a trap. He'd get them to lie, then he'd call them on it, and then—in five minutes—they were writing a check." According to Aaron, his star employee collected as much as $20,000 a month.

Aaron took it as a given that some of his collectors, the good and bad alike, might quit at a moment's notice. The industry was famous for employing "hoppers," who simply stopped coming to work one day and "hopped" to another agency where they thought they might do better for themselves. One of the most famous hoppers in Buffalo was a man of exceedingly short stature known as "Matt the Midget." "He had these extended pedals on his car so his feet could reach," Aaron said. When he showed up for an interview at Aaron's agency, Matt the Midget delighted Aaron's employees by leaping into the air and tapping his forehead with his own feet. Aaron's agency offered him a job, but unfortunately, Matt the Midget never showed up for work. Not even once.

What made it all worth it for Aaron was that he was making money. When he purchased an especially good portfolio of debt, the profits were astronomical. For example, he obtained one portfolio for $28,526, collected more than $90,000 on it in just six weeks, and then sold the remaining, uncollected accounts for $31,000. On that portfolio, he made a whopping net return of 199 percent. Aaron bought another portfolio of debt for $33,387, collected more than $147,000 on it in four months, and then sold the remaining accounts for $33,123. On this portfolio, his net return was 264 percent. Of course, not all of his deals proved to be this wildly profitable; but, on the whole, he was doing well with almost all of the paper that he purchased. This was in no small part because in 2006 he had begun buying paper from a debt broker named Brandon Wilson. Initially, at least, Aaron knew very little about Brandon. A business associate had recommended him, and right away, Brandon began to prove his worth—supplying good paper, with "plenty of meat on the bone" as they say in the business. "The paper that I bought from him performed wonderfully," recalled Aaron.

Excerpted from Bad Paper by Jake Halpern. Copyright © 2014 by Jake Halpern. Excerpted by permission of Farrar, Straus & Giroux. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.