5 ms·

This is "a" problem, not "the" problem. For a large number of people, getting $5k or $10k of debt erased would at the very least a large weight off their back,

This is "a" problem, not "the" problem. For a large number of people, getting $5k or $10k of debt erased would at the very least a large weight off their back, at the most a life changer. Living paycheck to paycheck means cherishing every extra dollar you get to keep. Getting to keep $50 or $100 a month in your pocket instead of sending off to some credit card or debt collection agency is a big deal sometimes. Most people who would probably take advantage of this don't even keep track of their credit because they're so behind anyway.

deleted 14y ago
[deleted]
rdtsc 14y ago
But I guess this is only for government and legally mandated wage garnishment. Otherwise if they already have the black mark on their credit, will paying back anything matter or change that? Is that true?
justindocanto 14y ago
But if theyre making payments on the debt, the debt collector won't sell it because theyre actually getting their money. The only debts OWS is going to be able to buy are the ones not making payments and the ones that havent made payments in a very long time. So, as cool as not having to pay 50/100 a month sounds, that wont happen to anybody because the ones paying are not the kind of people that would be getting relieved of their debt. Also, the people who havent paid their debt in years hardly benefit from this too (this might even make it worse in a way) because not only have they had an unpaid debt sitting there, they now have a new mark on their credit saying somebody gave up on collecting on them and that they sold their debt to somebody else. This is even worse, from my understanding of credit, for your credit score then it is to just let the debt sit there. The person in debt obviously isnt making any payments if it's up for sale, so it's not like it saves them any money. All this does is modify their credit score. This all sounded awesome skin deep, but as you look into it more... it doesnt really do much for anybody affected by Sandy or anybody in financial crisis in general. They're saving just a few people a few hundred bucks that wouldn't be coming out of their bank account for years to come... if at all, ever. They would be more productive just giving money to people affected by sandy then paying off debt that people have ignored for years anyway. People need food, shelter, clothes, toiletries, warmth... not a 'hey we paid off a debt you havent cared about for years and you dont get to see any of the money we just spent on you, but sorry your cold and good luck'.
- stickfigure 14y ago
  This seems like the key insight about this issue. The debts OWS buys on the cheap are debts that were never going to be paid off in the first place. The net practical effect of this action is to transfer money from well-meaning people into the hands of debt collection agencies. Seems like the only people being bailed out are debt speculators. Doesn't sound like a worthy cause to me.
  - elemenohpee 14y ago
    You're still only thinking in terms of the market. This action is about raising social capital.
    - greedo 14y ago
      How does this raise social capital? It's not helping the original debtor, and in fact, is increasing the demand for non-performing debt? Collection agencies will LOVE this program, since they can now actually make some money off of non-performing debt. If anything, this will result in collection agencies increasing their harassment of delinquent accounts.
      - elemenohpee 14y ago
        Because it's a signal to all these debtors that there's a significant segment of the population that doesn't want to play by the old rules. It shows that they can count on their fellow citizens to help them out when they are down on their luck, the very definition of social capital.
        greedo 14y ago
        Okay, say I'm in debt to BigHospital for my cancer treatments. I only owe $10K (ha!) and discharging this debt in bankruptcy is something I either couldn't afford or otherwise was unable to accomplish. I've managed to avoid paying the debt collectors for whatever reason, and I have this low value debt out there. It's par value might be $10k, but it's sold to Rolling Jubilee for $500. Rolling Jubilee discharges this debt. In practical terms, my credit is already shot. I wasn't able to pay off this debt anyways, so it's not as if I have more money in my pocket. Sure I might be able to rebuild my credit a bit faster depending on how Rolling Jubilee reports the handling of this debt etc etc. Maybe not. Even if it persists on my credit score, rebuilding credit isn't as hard once you get a decent steady job. If I don't have that, I have no business getting more credit, no? The old rules that you say no one wants to play by are still there at the end of the day. Oh, and "hey can count on their fellow citizens to help them out when they are down on their luck" doesn't seem to be the very definition of social capital from your link.

deleted 14y ago

[deleted]

rdtsc 14y ago

But I guess this is only for government and legally mandated wage garnishment. Otherwise if they already have the black mark on their credit, will paying back anything matter or change that? Is that true?

justindocanto 14y ago

But if theyre making payments on the debt, the debt collector won't sell it because theyre actually getting their money. The only debts OWS is going to be able to buy are the ones not making payments and the ones that havent made payments in a very long time. So, as cool as not having to pay 50/100 a month sounds, that wont happen to anybody because the ones paying are not the kind of people that would be getting relieved of their debt. Also, the people who havent paid their debt in years hardly benefit from this too (this might even make it worse in a way) because not only have they had an unpaid debt sitting there, they now have a new mark on their credit saying somebody gave up on collecting on them and that they sold their debt to somebody else. This is even worse, from my understanding of credit, for your credit score then it is to just let the debt sit there. The person in debt obviously isnt making any payments if it's up for sale, so it's not like it saves them any money. All this does is modify their credit score. This all sounded awesome skin deep, but as you look into it more... it doesnt really do much for anybody affected by Sandy or anybody in financial crisis in general. They're saving just a few people a few hundred bucks that wouldn't be coming out of their bank account for years to come... if at all, ever. They would be more productive just giving money to people affected by sandy then paying off debt that people have ignored for years anyway. People need food, shelter, clothes, toiletries, warmth... not a 'hey we paid off a debt you havent cared about for years and you dont get to see any of the money we just spent on you, but sorry your cold and good luck'.

stickfigure 14y ago
This seems like the key insight about this issue. The debts OWS buys on the cheap are debts that were never going to be paid off in the first place. The net practical effect of this action is to transfer money from well-meaning people into the hands of debt collection agencies. Seems like the only people being bailed out are debt speculators. Doesn't sound like a worthy cause to me.
- elemenohpee 14y ago
  You're still only thinking in terms of the market. This action is about raising social capital.
  - greedo 14y ago
    How does this raise social capital? It's not helping the original debtor, and in fact, is increasing the demand for non-performing debt? Collection agencies will LOVE this program, since they can now actually make some money off of non-performing debt. If anything, this will result in collection agencies increasing their harassment of delinquent accounts.
    - elemenohpee 14y ago
      Because it's a signal to all these debtors that there's a significant segment of the population that doesn't want to play by the old rules. It shows that they can count on their fellow citizens to help them out when they are down on their luck, the very definition of social capital.
      - greedo 14y ago
        Okay, say I'm in debt to BigHospital for my cancer treatments. I only owe $10K (ha!) and discharging this debt in bankruptcy is something I either couldn't afford or otherwise was unable to accomplish. I've managed to avoid paying the debt collectors for whatever reason, and I have this low value debt out there. It's par value might be $10k, but it's sold to Rolling Jubilee for $500. Rolling Jubilee discharges this debt. In practical terms, my credit is already shot. I wasn't able to pay off this debt anyways, so it's not as if I have more money in my pocket. Sure I might be able to rebuild my credit a bit faster depending on how Rolling Jubilee reports the handling of this debt etc etc. Maybe not. Even if it persists on my credit score, rebuilding credit isn't as hard once you get a decent steady job. If I don't have that, I have no business getting more credit, no? The old rules that you say no one wants to play by are still there at the end of the day. Oh, and "hey can count on their fellow citizens to help them out when they are down on their luck" doesn't seem to be the very definition of social capital from your link.