5 ms·

Weren't there reports back in the Occupy Wall Street days of people organizing to buy up debt like this and then just forgive it all? It sounds like debts are

by smeej 3y ago

Weren't there reports back in the Occupy Wall Street days of people organizing to buy up debt like this and then just forgive it all? It sounds like debts are sold in such bulk that there's no way to do something very targeted, like starting an org in your town to buy debt from your ZIP and collecting contributions to cancel your neighbors' debts, but if these debts are already only worth 5¢ on the dollar to the sellers, it seems like it would make quite a news story if you could. If I could buy up $2000 of my neighbors' debt for $100 and remove that burden from them? I think I would, at least occasionally. But even if you don't assume goodwill, if the whole community knew the plan was to buy and cancel everyone's debt, you could probably get the debtors themselves to band together to do it!

totetsu 3y ago
I think that works only the first time.
- lolinder 3y ago
  Why? The debt issuer has already written the debt off, why do they care whether it's bought by someone intent on forgiving it?
  - zepton 3y ago
    People are less likely to pay their debts if they think their debts will be sold to someone who will forgive it, so the debt issuer's other non-written-off debts will be harder to collect (since now those people know that they might be able to get out of their debts by waiting and hoping they get sold to a debt-forgiver).
    - lolinder 3y ago
      That becomes a problem if debt forgivers become a large percentage of purchasers. It doesn't "only work the first time", it only works as long as you're in a tiny minority, which will likely be forever. The debt issuer won't take notice until the value of their debt starts to drop.
  - PeterisP 3y ago
    The debt issuer would note that they had to write most of that debt off, so the credit score impact will mean that the same borrower will have a much harder time getting another loan.
    - lolinder 3y ago
      Ah, you're interpreting it differently: I took them as saying that you can only buy debt and forgive it once, not that you can only have your debt forgiven once.
dylan604 3y ago
I never heard of buying credit debt, but I had heard of people buying medical debt in this manner. I get and respect the medical debt concept. Credit debt though is a tough one. How can you tell that someone ran up credit debt because they were paying for medical bills or something vs debt financing shopping sprees or vacations? Giving those who fall on hard times help is admirable. Giving people bad at personal finance a free ride is not
- candiddevmike 3y ago
  Medical debt shouldn't be a thing in a civilized society. Credit card debt is a failure of the financial system to properly assess risk, credit cards shouldn't be that easy to get, and predatory credit card offers should be outlawed. Similar to how identity theft is somehow your problem when it's actually the banks and other systems that enable it.
  - milesvp 3y ago
    I’m not sure saying credit cards should be harder to get is the correct stance. I saw a paper talking about the rise of payday loans came at the cost of pawn shops. Basically there is a lot of demand for short term loans, I would argue that better access to credit would help many people greatly. The only thing I’m unclear on is how to avoid the predatory aspect. I’d assume that part of the usury terms of these kinds of loans is a response to such small amounts. Just paying the hourly cost of dealing with the transaction could put a $200 dollar loan into 5% territory without taking into account any risk profile. I’d be intereted in running experiments similar to cash giving charities. Measure how much a $2000 line of credit does to improve lives (hopefully without making them worse).
- owenmarshall 3y ago
  This strikes me as the same as saying “but the homeless person might take my $5 to buy whiskey instead of a hot meal.” Or, possibly more apropos to your example, “how do I know my medical debt relief payment goes to someone who truly Deserves It because of bad luck and not someone whose poor diet and exercise habits lead to their stroke?” The system is designed to turn bad choices into bad luck - and the opposite - and to pass moral judgements on those who need help. Reject the framing and help people; most are good and deserving.
mukara 3y ago
There are some non-profits specializing in buying up medical debt and forgiving it (e.g. RIP Medical Debt [0]). These non-profits usually rely on individual donations, and $100 can relieve as much as $10,000 of medical debt. They also frequently rely on donations from other organizations such as churches [1]. There are examples of churches buying up tens of millions of dollars worth of debt [2]. I'm not aware of this being done for other kinds of debts, although I would assume it happens. [0] https://ripmedicaldebt.org/ https://ripmedicaldebt.org/ [1] https://www.cnn.com/2023/04/26/us/debt-jubilee-medical-trinity-moravian-cec/index.html https://www.cnn.com/2023/04/26/us/debt-jubilee-medical-trini... [2] https://www.bostonglobe.com/2020/10/25/metro/new-england-churches-buy-up-forgive-262-million-medical-debt/ https://www.bostonglobe.com/2020/10/25/metro/new-england-chu...
- czbond 3y ago
  Thank you for posting these. I've been looking for a specific way that gives back and I like this route.
twism 3y ago
whoever wants to do that should knock themselves out. OP, just told me it doesn't matter if it gets paid or not at this point.
acyou 3y ago
That's a zero sum game. It just increases the value of that debt.
WirelessGigabit 3y ago
John Oliver did that on his show: https://money.cnn.com/2016/06/06/technology/john-oliver-medical-debt/index.html https://money.cnn.com/2016/06/06/technology/john-oliver-medi...
marssaxman 3y ago
> people organizing to buy up debt like this and then just forgive it all Yes indeed - that was the Rolling Jubilee, run by a group called Strike Debt. They apparently still operate, under the name Debt Collective: https://debtcollective.org/what-we-do/debt-abolition/ https://debtcollective.org/what-we-do/debt-abolition/
PeterisP 3y ago
The obvious limitation is that they only sell hopeless debt for pennies on the dollar - no lender will allow a community to buy all of their debt at a significant discount. You'll be able to buy your neighbors' debt only if your neighbour is either a complete deadbeat or their circumstances have changed so much that they are totally bankrupt; every other neighbor's debt won't be for sale.

by smeej 3y ago

totetsu 3y ago

I think that works only the first time.

lolinder 3y ago
Why? The debt issuer has already written the debt off, why do they care whether it's bought by someone intent on forgiving it?
- zepton 3y ago
  People are less likely to pay their debts if they think their debts will be sold to someone who will forgive it, so the debt issuer's other non-written-off debts will be harder to collect (since now those people know that they might be able to get out of their debts by waiting and hoping they get sold to a debt-forgiver).
  - lolinder 3y ago
    That becomes a problem if debt forgivers become a large percentage of purchasers. It doesn't "only work the first time", it only works as long as you're in a tiny minority, which will likely be forever. The debt issuer won't take notice until the value of their debt starts to drop.
- PeterisP 3y ago
  The debt issuer would note that they had to write most of that debt off, so the credit score impact will mean that the same borrower will have a much harder time getting another loan.
  - lolinder 3y ago
    Ah, you're interpreting it differently: I took them as saying that you can only buy debt and forgive it once, not that you can only have your debt forgiven once.

dylan604 3y ago

I never heard of buying credit debt, but I had heard of people buying medical debt in this manner. I get and respect the medical debt concept. Credit debt though is a tough one. How can you tell that someone ran up credit debt because they were paying for medical bills or something vs debt financing shopping sprees or vacations? Giving those who fall on hard times help is admirable. Giving people bad at personal finance a free ride is not

candiddevmike 3y ago
Medical debt shouldn't be a thing in a civilized society. Credit card debt is a failure of the financial system to properly assess risk, credit cards shouldn't be that easy to get, and predatory credit card offers should be outlawed. Similar to how identity theft is somehow your problem when it's actually the banks and other systems that enable it.
- milesvp 3y ago
  I’m not sure saying credit cards should be harder to get is the correct stance. I saw a paper talking about the rise of payday loans came at the cost of pawn shops. Basically there is a lot of demand for short term loans, I would argue that better access to credit would help many people greatly. The only thing I’m unclear on is how to avoid the predatory aspect. I’d assume that part of the usury terms of these kinds of loans is a response to such small amounts. Just paying the hourly cost of dealing with the transaction could put a $200 dollar loan into 5% territory without taking into account any risk profile. I’d be intereted in running experiments similar to cash giving charities. Measure how much a $2000 line of credit does to improve lives (hopefully without making them worse).
owenmarshall 3y ago
This strikes me as the same as saying “but the homeless person might take my $5 to buy whiskey instead of a hot meal.” Or, possibly more apropos to your example, “how do I know my medical debt relief payment goes to someone who truly Deserves It because of bad luck and not someone whose poor diet and exercise habits lead to their stroke?” The system is designed to turn bad choices into bad luck - and the opposite - and to pass moral judgements on those who need help. Reject the framing and help people; most are good and deserving.

mukara 3y ago

There are some non-profits specializing in buying up medical debt and forgiving it (e.g. RIP Medical Debt [0]). These non-profits usually rely on individual donations, and $100 can relieve as much as $10,000 of medical debt. They also frequently rely on donations from other organizations such as churches [1]. There are examples of churches buying up tens of millions of dollars worth of debt [2]. I'm not aware of this being done for other kinds of debts, although I would assume it happens. [0] https://ripmedicaldebt.org/ https://ripmedicaldebt.org/ [1] https://www.cnn.com/2023/04/26/us/debt-jubilee-medical-trinity-moravian-cec/index.html https://www.cnn.com/2023/04/26/us/debt-jubilee-medical-trini... [2] https://www.bostonglobe.com/2020/10/25/metro/new-england-churches-buy-up-forgive-262-million-medical-debt/ https://www.bostonglobe.com/2020/10/25/metro/new-england-chu...

czbond 3y ago
Thank you for posting these. I've been looking for a specific way that gives back and I like this route.

twism 3y ago

whoever wants to do that should knock themselves out. OP, just told me it doesn't matter if it gets paid or not at this point.

acyou 3y ago

That's a zero sum game. It just increases the value of that debt.

WirelessGigabit 3y ago

John Oliver did that on his show: https://money.cnn.com/2016/06/06/technology/john-oliver-medical-debt/index.html https://money.cnn.com/2016/06/06/technology/john-oliver-medi...

marssaxman 3y ago

> people organizing to buy up debt like this and then just forgive it all Yes indeed - that was the Rolling Jubilee, run by a group called Strike Debt. They apparently still operate, under the name Debt Collective: https://debtcollective.org/what-we-do/debt-abolition/ https://debtcollective.org/what-we-do/debt-abolition/

PeterisP 3y ago

The obvious limitation is that they only sell hopeless debt for pennies on the dollar - no lender will allow a community to buy all of their debt at a significant discount. You'll be able to buy your neighbors' debt only if your neighbour is either a complete deadbeat or their circumstances have changed so much that they are totally bankrupt; every other neighbor's debt won't be for sale.