Occupy Wall Street campaigners buy up debt to abolish it

[Brooklyn Red Leg]

Courtesy of Robin Koerner/Blue Republicans Facebook:


A group of campaigners linked to the Occupy Wall Street movement is buying-up distressed loans for pennies in the pound and cancelling them to "liberate debtors at random".

The Rolling Jubilee (http://rollingjubilee.org/) project is seeking donations to help it buy-up distressed debts, including student loans and outstanding medical bills, and then wipe the slate clean by writing them off.

Individuals or companies can buy distressed debt from lenders at knock-down prices if it the borrower is in default or behind with payments and are then free to do with it as they see fit, including cancelling it free of charge.



As a test run the group spent $500 on distressed debt, buying $14,000 worth of outstanding loans and pardoning the debtors. They are now looking to expand their experiment nationwide and are asking people to donate money to the cause.


David Rees, one of the organisers behind the project, writes on his blog (http://howtosharpenpencils.tumblr.com/post/35285338188/the-peoples-bailout): "This is a simple, powerful way to help folks in need - to free them from heavy debt loads so they can focus on being productive, happy and healthy.



"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."

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9666748/Occupy-Wall-Street-campaigners-buy-up-debt-to-abolish-it.html

Now this is AWESOME! We really need to reach out to these people and start working with them. This is the way we help people and teach them about Mutual Aid Societies. This is what many of us talk about when it comes to charity helping where government fails. THIS IS THE TEACHING MOMENT!

[angelatc]

We could even do that. We could clean up the credit reports too. That's an awesome idea.

[eric_cartman]

might as well just throw your money into a black hole.

never thought i'd see the day when occupy wall st. starts giving their money directly to the banksters.

[Brooklyn Red Leg]

might as well just throw your money into a black hole.

never thought i'd see the day when occupy wall st. starts giving their money directly to the banksters.

WTF? Do you NOT understand this will help people that got run over by the Banksters? Its using their own goddamn rules AGAINST THEM! What more do you want to do to stick it to them?

[angelatc]

WTF? Do you NOT understand this will help people that got run over by the Banksters? Its using their own goddamn rules AGAINST THEM! What more do you want to do to stick it to them?

Well, I'm not sure this is sticking it to the banks. If we were to all run up our credit cards with the intention of not paying them - that would be sticking it to them. (It would also be fraud.)

And I'm not about to start donating cash to OWS, either. But I would support the concept.

[2young2vote]

Here is a logical progression of how this is going to work if it is "successful":

Bank loans $50,000 to a person.

Person "can't" pay off debt so the bankers sell it to this organization.

organization writes-off debt.

Person tells friends about this great way to pay for stuff and not have to worry about debt.

Person's friends do the same thing then tell their friends who tell their friends etc...

Eventually the banks realize that they are losing too much money by issuing these loans and tighten restrictions on who can and cannot get them.

Occupy Wallstreet and other socialist organizations complain about how greedy the banks are for not giving out more loans.


I don't actually think they are going to get to a level that will affect anything like this, but the idea would result in the above. It isn't sustainable in the long run on a large scale.

[Brooklyn Red Leg]

I don't actually think they are going to get to a level that will affect anything like this, but the idea would result in the above. It isn't sustainable in the long run on a large scale.

WTF? Where have you been for the last few years? They aren't loaning to anyone as it is NOW! They will continue to NOT lend because QE-Infinity is here.

[angelatc]

I was thinking about this a little more, and they might not be doing these people much of a favor. As it stands now, and I am speaking in general terms, if you don't pay a bill - 7 years after you stop paying it, the debt essentially vanishes. It's still out there, I suppose, but it drops off your credit reports and there are no repercussions for not paying it.

If the debt is forgiven, the forgivee incurs an income tax liability. I would be pretty pissed if a debt that I stopped paying 6.75 years ago suddenly turned into a tax liability, which doesn't ever vanish.

[presence]

http://rollingjubilee.org/

http://rollingjubilee.org/assets/img/fg_logo.png



A bailout of the people by the people.

We buy debt for pennies on the dollar, but instead of collecting it, we abolish it. We cannot buy specific individuals' debt - instead, we help liberate debtors at random through a campaign of mutual support, good will, and collective refusal.

The Jubilee begins November 15

with "The People's Bailout (http://www.lepoissonrouge.com/lpr_events/peoples-bailout/)," a variety show and telethon in NYC.
All proceeds will go directly to buying people's debt and cancelling it.

Want to donate while we're still setting up?

DONATE (https://www.paypal.com/us/cgi-bin/webscr?cmd=_flow&SESSION=JkrwcomonSOorfooejeMBxdXY4qjetEZnaCuxvaMAI PB1VsenZMoxBgRYie&dispatch=5885d80a13c0db1f8e263663d3faee8d0b7e678a2 5d883d0fa72c947f193f8fd)

[Acala]

Hahahaha! This is allowed because the banks will be paid in full. How about a movement where people just stop paying their debts to banks and their taxes? Now THAT would change the world pretty darn fast. Of course the tanks would be rolling after a week.

[parocks]

http://www.care2.com/causes/occupy-wall-street-is-buying-and-paying-the-99s-debt.html#13527760678491&action=collapse_widget&id=2635061

This is interesting.

[angelatc]

There are already a couple of other threads on it.

I think it's a bad idea, because forgiven debt incurs a tax liability. If the debt if just ignored, it doesn't. But I can't find the other thread that I raised that point in, so I don't know if someone else followed up on that thought.

[parocks]

There are already a couple of other threads on it.

I think it's a bad idea, because forgiven debt incurs a tax liability. If the debt if just ignored, it doesn't. But I can't find the other thread that I raised that point in, so I don't know if someone else followed up on that thought.

I should say that merge this thread.

I would imagine bankers don't like the idea of lots of people talking about Jubilee. They have End The Fed to worry about, and this.

[parocks]

Hahahaha! This is allowed because the banks will be paid in full. How about a movement where people just stop paying their debts to banks and their taxes? Now THAT would change the world pretty darn fast. Of course the tanks would be rolling after a week. It doesn't quite work that way. I think these debts have already been written off by banks. There's a secondary market, and rolling jubilee is buying these debts for pennies on the dollar.

[angelatc]

It doesn't quite work that way. I think these debts have already been written off by banks. There's a secondary market, and rolling jubilee is buying these debts for pennies on the dollar.

Yes, you're exactly right. The bank only got pennies on the dollar, and won't get any more.

[parocks]

Yes, you're exactly right. The bank only got pennies on the dollar, and won't get any more.

Basically what I think is happening is that the OWS people will be competing in the secondary market. The banks it appears will be getting more money than they ordinarily would. More people competing to buy these loans, the price goes up.

[adisongrace]

http://blogs.providencejournal.com/arts-entertainment/subterranean/2012/11/links-pats-play-predictor.html

I'm considering launching my own own #lowdebt campaign. Thoughts?

[angelatc]

thread #5 ... 3 of the other 4 are here. #4 had no discussion. http://www.ronpaulforums.com/showthread.php?395252-Occupy-Wall-Street-campaigners-buy-up-debt-to-abolish-it&highlight=Occupy+debt

[angelatc]

Basically what I think is happening is that the OWS people will be competing in the secondary market. The banks it appears will be getting more money than they ordinarily would. More people competing to buy these loans, the price goes up.

That thought occurred to me too, but I doubt the OWS people will have enough cash to buy enough to effect the market.

ETA: This article addresses the tax issue, and says that since OWS isn't a corporation or a business, they can gift the forgiveness, thus avoiding triggering the tax event So now I'm back to it being a good idea. http://www.forbes.com/sites/timworstall/2012/11/10/links-10-nov-finally-an-occupy-wall-street-idea-we-can-all-get-behind-the-rolling-jubilee/

[adisongrace]

Okay. So let's discuss?...

[Carehn]

Banks will sale loans for less because the bank thinks its going to gets stiffed anyway and will take less of a loss. If massive amounts of money enter the market in order to buy bad loans then the price of bad loans will go up ( supply and demand).

But we all know that the amount of dept is HUGE. And I for one feel most of the individuals with the dept have it because of their own stupidity.

This is also not a new concept. It has been going on for years.


I have no desire to help some hipster get out of his interpretive dance degree dept or some middle aged family of shit heads who mortgaged their futures for trinkets and an ugly modern day disaster of architecture house on its ten square foot lot.

Let them file bankruptcy, grow a brain, learn basic math, and start over like God intended stupid people to do.

[angelatc]

Banks will sale loans for less because the bank thinks its going to gets stiffed anyway and will take less of a loss. If massive amounts of money enter the market in order to buy bad loans then the price of bad loans will go up ( supply and demand).

But we all know that the amount of dept is HUGE. And I for one feel most of the individuals with the dept have it because of their own stupidity.

This is also not a new concept. It has been going on for years.


I have no desire to help some hipster get out of his interpretive dance degree dept or some middle aged family of shit heads who mortgaged their futures for trinkets and an ugly modern day disaster of architecture house on its ten square foot lot.

Let them file bankruptcy, grow a brain, learn basic math, and start over like God intended stupid people to do.

Well, they don't get to choose which debt to forgive. They just get random debt.

[UWDude]

Here is a logical progression of how this is going to work if it is "successful":

Bank loans $50,000 to a person.

Person "can't" pay off debt so the bankers sell it to this organization.




The system already works this way. Learn how collection companies make their money, then reform your misguided prognostications.

The only difference is collection agencies try to collect the money. Depending on how little they purchased the debt for, they only hope to collect from enough people to cover their expenses. ie, if they buy debts for 20% of the cost, then they only need to collect on 21% of the debts to make a profit.

Once a bank sells unpaid debt, it's not on their books anymore.* They couldn't care less if the buyer ever collects or not. That is now the debt buyers' problem.
Likewise, that is why banks charge interest. Because they know some people will not pay the entire principle plus interest back.



*except when they merged banks with investment firms, and then started buying derivatives. Then, in a round-about way, it became their problem again. LoL What an incestuous clusterfuck of stupid inbreeds!

[RonPaulFanInGA]

WTF? Do you NOT understand this will help people that got run over by the Banksters? Its using their own goddamn rules AGAINST THEM! What more do you want to do to stick it to them?

One is "sticking" it to them, by buying what they're selling for the listed price?

[opal]

I was thinking about this a little more, and they might not be doing these people much of a favor. As it stands now, and I am speaking in general terms, if you don't pay a bill - 7 years after you stop paying it, the debt essentially vanishes. It's still out there, I suppose, but it drops off your credit reports and there are no repercussions for not paying it.

If the debt is forgiven, the forgivee incurs an income tax liability. I would be pretty pissed if a debt that I stopped paying 6.75 years ago suddenly turned into a tax liability, which doesn't ever vanish.

In theory this is how things work but not in the real world anymore. I refused to pay a quack doctor in the early 90's - told him too (he's since been deported) and that's still on my credit report. Hubby's X ran up some debt after they seperated and he got an established residence 2000 miles away on both an electric bill and a cable bill that were over 10 years ago and they're still on the credit reports too. If Cox cable came where we live - he could not get an account with them unless that bill that his X didn't pay was resolved first. We found that out two residences ago - and it was after that 7 year thing too.

[PaulConventionWV]

I was thinking about this a little more, and they might not be doing these people much of a favor. As it stands now, and I am speaking in general terms, if you don't pay a bill - 7 years after you stop paying it, the debt essentially vanishes. It's still out there, I suppose, but it drops off your credit reports and there are no repercussions for not paying it.

If the debt is forgiven, the forgivee incurs an income tax liability. I would be pretty pissed if a debt that I stopped paying 6.75 years ago suddenly turned into a tax liability, which doesn't ever vanish.

The IRS, per its own policy, does not pursue any liabilities past 6 years.

[jt8025]

I was thinking about this a little more, and they might not be doing these people much of a favor. As it stands now, and I am speaking in general terms, if you don't pay a bill - 7 years after you stop paying it, the debt essentially vanishes. It's still out there, I suppose, but it drops off your credit reports and there are no repercussions for not paying it.

If the debt is forgiven, the forgivee incurs an income tax liability. I would be pretty pissed if a debt that I stopped paying 6.75 years ago suddenly turned into a tax liability, which doesn't ever vanish.

It is my understanding that something falls off of your credit report 7 years after it is REPORTED as an unpaid debt not when it was last paid. So you could not pay on something, the people you are not paying report it to the credit agency and the 7 years start. But they can report it every month or even more torturous report it again at 6.75 years and start the 7 year clock over.

I haven't read the article yet but it seems like the "debt forgiveness" could be like a gift and subject to gift tax only over something around $12,000. Sort of like someone buys your bad $20,000 debt for $2,000 and then "gives" you $2,000 to pay the debt off they own. The debt was paid so no "forgiveness tax" and the gift was under the taxable amount per person given to and therefore no gift tax.

[angelatc]

In theory this is how things work but not in the real world anymore. I refused to pay a quack doctor in the early 90's - told him too (he's since been deported) and that's still on my credit report. Hubby's X ran up some debt after they seperated and he got an established residence 2000 miles away on both an electric bill and a cable bill that were over 10 years ago and they're still on the credit reports too. If Cox cable came where we live - he could not get an account with them unless that bill that his X didn't pay was resolved first. We found that out two residences ago - and it was after that 7 year thing too.

Without knowing the particulars, that isn't a theory, it is federal law. If your husband has a judgement, those can stay on for 10 years, plus another 10 if they go back to court.

But if it's just a random bill from an old debt, federal law says it has to be removed. Note that it's 7 years from the last date of activity, not 7 years from the date of the bill. So if he was paying on it and stopped, the clock didn't start ticking until then.

If you want help getting it off, PM me with more details. My brother in law knows this stuff inside and out.

[Cleaner44]

I was thinking about this a little more, and they might not be doing these people much of a favor. As it stands now, and I am speaking in general terms, if you don't pay a bill - 7 years after you stop paying it, the debt essentially vanishes. It's still out there, I suppose, but it drops off your credit reports and there are no repercussions for not paying it.

If the debt is forgiven, the forgivee incurs an income tax liability. I would be pretty pissed if a debt that I stopped paying 6.75 years ago suddenly turned into a tax liability, which doesn't ever vanish.

There should only be a tax problem if the company that owns the debt tells the IRS they settled for less and wrote off the balance. If the OWS group bought the debt and then never attempted to collect, there would be no settlement and no tax liability. They simply become a debt collector that isn't interested in collecting. That is their unprofitable choice, they certainly aren't required to pursue a profit.

[angelatc]

The IRS, per its own policy, does not pursue any liabilities past 6 years.

That's not true at all. But I don't want to argue with you, because you already know everything. I just want to let everybody else know ... that's not true at all.

But they have up to 10 years to collect any unpaid tax liability, (http://www.law.cornell.edu/uscode/search/display.html?terms=6502&url=/uscode/html/uscode26/usc_sec_26_00006502----000-.html) and their clock doesn't start running until they assess the final amount due. So if you don't file, and they wait 9 years to file for you, the clock starts ticking then. If you then file bankruptcy, the clock stops ticking during the whole process and also for 6 months after. Then it starts again. There are also several other activities that can temporarily stop the clock.

(No need to argue with me. I am clearly making all this up and don't actually know guy this is happening to. )

[adisongrace]

I think this idea of buying up debt and erasing it can be very beneficial to change the conversation in our economy.
#OWS has been attacked for not "acting" and just demonstrating. Let's give this campaign a fair chance to succeed
before we cast judgement upon the holes in its implementation. People will exploit any system given the chance.
We just have to know that we are erasing debt by buying it low--we are doing it for reasons that are purely to
erase their long bill. Another way is we could just end the FED Reserve all together...but not are on board for that...