November 9, 2012

A cheap way to to get rid of debt: buy it

How to Sharpen Pencils -Occupy Wall Street is launching the Rolling Jubilee, a program that has been in development for months. OWS is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it. As a test run, we spent $500, which bought $14,000 of distressed debt. We then erased that debt. (If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A more awesome game.)

Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program live and nationwide, buying debt in communities that have been struggling during the recession.

2 comments:

Anonymous said...

Now THAT is EXCITING!!!

Anonymous said...

I hope Occupy's process tries to distinguish between the types of debt that are sold this way. Let me explain.

Frequently debt sold this way is fraudulent on the part of the collectors, for example I had some credit problems in college back in the late 80s. By 1991 I had resolved all the problems and closed the accounts because of the high rates. But, because I was headed for collection in 1989 on about 3 cards, before the debt was paid, those card numbers and my name were sold and resold as valid debt for years. During this time the dates of the "debt" kept being adjusted to avoid the 7 year statute of limitations. Finally in the early 2000s one of the "creditors" tried to get a judgment against me for $4000, on a paid off credit card that had a $1000 limit. I took this to an attorney and he explained what a scam this all is, and he got me $5000, a cleaned up credit report, and a letter stating this debt doesn't exist. I learned a lot from the attorney about how this whole sleazy industry works.

A friend of mine got relief from a similar situation by contacting the state Attorney General's office and filing a complaint. The AG's office stopped the collectors efforts and cleared my friends credit report. So many people who are being hounded by this sort of collector may be able to get their own debt taken care of if they just take time to contact their state AG.

What Occupy is doing is heroic, but since they don't have huge money reserves, I hope they help people who can resolve the debt on their own to do it. Then the debt purchases can be directed to the people who would not have so easy an out. I really hate the idea that Occupy would be paying debt brokers for fraudulent debt, which bolsters the debt broker's bottom line.