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Old 11-11-2012, 10:36 AM   #1
Despanan
 
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The People's Bailout

So, Occupy has really hit it's stride in the last few weeks, first there was Occupy Sandy which, besides the crazy amounts of mutual aid, resulted in the red-cross, the national guard and FEMA coming to US for advice and support, while in Far Rockaway the NYPD and FDNY were chanting Occupy slogans while working hand in hand with occupiers.

But now we've got, in my opinion, the coolest thing to come out of Occupy since...well, ever:
The People's Bailout

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The People's Bailout: Occupy is forgiving personal debtNOV 09 2012

Occupy Wall Street continues to show that it's more than just a simple protest movement. They have been doing amazing work with Hurricane Sandy relief and now there's Rolling Jubilee. Here's how Rolling Jubilee works:

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.)

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. As you can see from our test run, the return on investment approaches 30:1. That's a crazy bargain!

This has my vote for idea of the year. Well, until the debt sellers catch on and either raise the price due to demand or refuse to sell to untrusted brokers.
CNN article on it: http://money.cnn.com/2012/11/09/pf/o...t-strike-debt/

So yeah, Occupy has already easily wiped out $14,000 of debt for one anonymous person. Can you imagine what could be done for the Debt Crisis, not to mention people's lives if this gains traction as a cultural meme? Literally anybody can do this, it doesn't even have to be occupy, it doesn't have to be political whole communities can get together and cancel millions of dollars in debt for pennies on the dollar.



That's how you fuckin' do direct action.

These two incidents could easily be considered a germination of the seeds Occupy planted in Zuccoti last year, not to mention a really incredible of example of anarchist structure and ideas in practice.

If nothing else shows what an educated, radicalized populace can do with a tiny fraction of the State's resources.
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Old 11-11-2012, 10:59 AM   #2
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I'm really curious to see what the response to this is.
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Old 11-11-2012, 11:10 AM   #3
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I'm really curious to see what the response to this is.
The pessimist in me guesses that it will be ignored until it starts to make a serious structural impact...then it will be made illegal.

Which will probably at least force the banks and the state to tip their hands and admit that we were never supposed to be able to get out of debt in the first place.

In any case, the debt crisis is going to need some sort of radical solution. Hopefully this can be a part of it.
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Old 11-11-2012, 11:18 AM   #4
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I can already see the conservative justification for it to be made illegal.
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Old 11-11-2012, 01:06 PM   #5
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This needs to get more popular.

I told my mother about it and she got very excited about the idea.

This looks like it COULD potentially be a way to combat debt in a way that's fair to those that are in debt.

Let it pick up popularity. Let the communities exercise some autonomy and liberate their neighbors, family and friends. Let this become a thing.

And watch how god damned crazy people will get when the state and the capitalists try to make it illegal.
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Old 11-11-2012, 02:09 PM   #6
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I can already see the conservative justification for it to be made illegal.
Conservative economists will probably say that mass debt cancellation will cause inflation, which is hilarious because inflation is good for those in debt. (if you have $50,000 of debt and the dollar loses half it's value, your debt is also halved.)

Conservative pundits will probably make the argument that moral people always pay their debts, and therefor it's immoral to cancel them.

Liberals will probably make the argument that this kind of mutual aid will crash the economy, and that the only way out of debt will be to produce ourselves out of it FDR style, while ignoring that this will lead to an overproduction crisis which will eventually bottom-out and leave us in a 1930's style depression...except with environmental devastation on top of it, so the liberal capitalists can start turning a profit off clean air.
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Old 11-11-2012, 02:58 PM   #7
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Is there an option for the people who have had their debt cancelled to donate what they can to be rolled forward to buy someone else's debt?
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Old 11-11-2012, 03:11 PM   #8
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Is there an option for the people who have had their debt cancelled to donate what they can to be rolled forward to buy someone else's debt?
I'd figure there would be. The 14K was just a test run. Since you can't buy specific debt, I would assume the person person who's debt was struck was anonymous. Maybe we can get a letter out to them and provide a way to donate to a rolling Jubillee.

That's what they're calling it, so I assume it should roll when we start officially. There's a fundraiser coming up for it.
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Old 11-11-2012, 04:30 PM   #9
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I think that it's an amazing thing.. and I can't imagine the relief that people would feel knowing that they aren't going to be harassed by debt collectors anymore.

I think that a lot of people would also enjoy the sense of personal agency that would be afforded them by being able to pay just a little bit to the cause so that others are helped the same way that they've been.

I think that this is probably the best thing that I've read in a few months. Thank you.
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Old 11-12-2012, 09:41 AM   #10
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http://credit.about.com/od/reducingd...celleddebt.htm

I can't think of why this wouldn't apply...

It's a great thing and would make me a lot more likely to contribute funds to the Occupy cause. Before I was very uncertain about what they were going to use cash reserves for (or how to prevent the treasurer or whoever from screwing off with it) so I donated physical items to a few Occupations in MA and ME. This is definitely something I can support. Way too much of my income over the last ... decade went to servicing debt that could have been put to better use. I can't be the only one.

-just thought, if Occupy is required to send people that 1099-C or do whatever for reporting, they better have people on it. Hopefully that's something already covered.
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Old 11-12-2012, 01:46 PM   #11
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We should be able to. OWS actually had a large number of very good accountants volunteer to handle the money back when we had half a million dollars.

Absinthe: Don't thank me, thank Occupy Theory, they're the workinggroup who came up with it.

Johnathan: What I can tell you is that any money and any spending we do will be insanely scrutinized, by activists, crazy people, and agent provocateurs, not to mention right-wing groups interested in finding dirt on us.

Occupy has, in many ways, become more effective since the GA froze our account.
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Old 11-12-2012, 04:07 PM   #12
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Right on. The bigger groups I figured were going to have a lot of eyes on them, but I just wanted to make sure I wasn't funding Occupy Cayman Islands. I figured blankets, coats and gloves, and a couple of pizzas would go to good use.

I'm going to have to see what I can jump in on that front here on the West Coast since I'm going to be here a while.
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Old 11-13-2012, 01:29 PM   #13
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This is a horrible idea. It sounds like it was cooked up by the banks. Here's why -

That $14,000 in debt they bought for $500 was bought from a third tier collection company. See, when a bank loan, credit card, medical bill, or other personal debt defaults it is sold to a collections company. It is sold for about half of what it is worth.

The collection company then tries for a few months to get the money. If they can't get it they then sell it on to another collections company, a second tier collections company that specialises in hard to get paybacks, for again, about half of what they paid for it, so about a quarter of the original value.

These guys are a bit dodgy and underhanded, but sure, they have nothing on the final group of bottom feeders who get it after a couple years, the third tier collections groups who go all out and try and track down and pressure people to pay on these loans, as they don't find that many but when they do they really hammer then as they are making a 75% profit.

Now, you might think buying those loans is a good thing, but you are buying them from tier 3 collection groups for pennies on the dollar as they know even these people who specialise in this cannot collect that money.

What happens if they cannot collect? The statute of limitations kicks in, every state has one for debt, and all the debt is WIPED CLEAN after a certain number of years.

My point is this -

First, by the time it reaches the point you can buy debt for that small amount it is already worthless as multiple companies who spealise in debt collection could not get it. The person who has the debt has already had their credit rating ruined, you are not helping them. All you are doing is paying some bottom feeders for a debt that is never going to be collected anyway that in no way helps the original person, and will be written off in a matter of months.
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Old 11-13-2012, 01:44 PM   #14
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If they're buying debt that is past the statute of limitations, sure. Do we know for a fact that is the case?

I hope they are not throwing away money on literally junk debt.

That said, there are an awful lot of people who don't know their rights. Companies do try to collect on purchased debts whether it is legal for them to do so or not. Occupy absorbing these still saves people from harassment and financial distress.

Student loans seem to be one of the types of debt they are targeting. There is no statute of limitations on those.
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Old 11-13-2012, 09:24 PM   #15
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This is actually what I was worried about. It's nice that they've eliminated this debt, but says nothing on the person's credit score. They're already a lost cause for themselves. A credit score that low, you probably couldn't rend a cardboard box.
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Old 11-14-2012, 12:23 AM   #16
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There is a limit on some student debt. It depends on where they got the debt and when they got the debt. Without more details you wouldn't know. My guess is, if a company is going to sell it cheap it most certainly isn't going to be the kind that doesn't expire.

The reality is though, if they are getting $14,000 for $500 that right there is unrecoverable debt that is about to be written off anyway.

Also a bit more information for you -

Your credit score in America 'resets' after seven (7) years. That's right, even if you go bankrupt, or even if you do not officially go bankrupt but just get a shit-tonne of judgments against you because you just stop paying on all of your debt because you can't afford to pay it back, seven years later your credit rating will 'reset' and it will be like the day you turned 18 again.

One small loophole to this and the statue of limitations law -

Creditors can sue you for the debt. Even if they cannot locate you to serve you with papers if they can convince a judge they cannot find you and that you are in hiding to avoid paying the debt the judge can order you to repay the debt even though you never got your fair day in court. That being said that judgement also has a statute of limitations. So lets say your states statute on debt is six years, if the collections company sues on the last day they can and get the judge to sign off on it, it pushes the clock back six years as the new judgement they secure is valid, HOWEVER it also has a six year time limit in regards to the statute of limitations. Some states vary on this a few years either way, but the reality is ALL debt goes away in about six years, sometimes twelve if the collections company can get a judgement against you in your absence. Depends on the state, the company, and the judge. You have a 50/50 chance of it being extended.

All that being said it still doesn't change the fact after the statute runs out on the JUDGEMENT the same rules apply - debt collectors can no longer legally collect the debt, it is written off, and seven years after the collection time has expired it is removed from your credit records, like it never existed.

I left America twelve years ago. I left behind a mountain of debt (in excess of six figures). You can check your credit rating every six months for free via the web on all three major US credit rating companies. My credit rating right now is as pristine as it was the day I turned 18.

Side note - as mentioned above it still does not stop the dodgy debt collectors who bought the unrecoverable debt from sending me threatening letters and harassing phone calls claiming I am wrong, even though I know i am right. I can file a formal complaint and in writing tell them to stop contacting me and they will by law have to comply, but I just ignore them as last time I moved I never updated my contact details and these days they are harassing the wrong people.


This is one topic I know a bit about because I lived through it.

Here is a nice chart showing the statute of limitations on debt State by State.

http://www.creditinfocenter.com/rebu...itations.shtml
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Old 11-14-2012, 08:30 AM   #17
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The seven year reset happens on each negative remark's seventh anniversary, it is not a credit score reboot unless every negative report occurred on the same day. The people in dire financial trouble have rolling incidents, when they have to decide who they can afford to pay this month and a creditor gets left out, the seven year clock gets reset on that particular debt and the start counting down from day 1 again.

If you declare bankruptcy or flee the country I guess, then yes they would all be on the same "cool down timer". The seven year clock starts ticking on everything except most student loans. Many of those don't care about bankruptcy and can be extremely difficult to expunge without getting a court to agree to "undue hardship".
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Old 11-14-2012, 12:49 PM   #18
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Doesn't it cost money to declare bankruptcy? And after it's all been declared and settled and it's seven years later, don't you still get asked credit companies and places if you've ever declared bankruptcy?
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Old 11-14-2012, 04:59 PM   #19
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Doesn't it cost money to declare bankruptcy? And after it's all been declared and settled and it's seven years later, don't you still get asked credit companies and places if you've ever declared bankruptcy?
Since you can only declare it once every seven years, some lenders like it. Before they have the risk of a borrower declaring bankruptcy, once you have then the debt sticks with you with no out (until you can declare bankruptcy again). I don't know if that counts as predatory lending but it seems like it should.

Seven years after the bankruptcy, I don't think the reporting agencies can disclose past bankruptcies. I guess some people can be serial bankrupters, racking up debts and stuff and then declare every seven years to the day to "screw" their lenders. That's kind of an outlier, but part of the justification for high interest rates - they want to make their money from the financing.

Abuse on both sides (admittedly power is heavily weighted to the creditors than the debtors) is why we can't have nice things.

Yes, it costs money to declare bankruptcy, but in the lead up to it creditors have to stop attempting to collect. You'll need to save up somewhere around 2k US -- a good chunk of cash out of pocket, but it is supposed to be something of an extreme measure.
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Old 11-14-2012, 05:10 PM   #20
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Since you can only declare it once every seven years, some lenders like it. Before they have the risk of a borrower declaring bankruptcy, once you have then the debt sticks with you with no out (until you can declare bankruptcy again). I don't know if that counts as predatory lending but it seems like it should.
It seems like there are a lot of things that really should be classed as predatory lending (for example) and aren't. One of the running jokes in the bookshop I work in is that the text book we sell called Moral Issues In Business is only about 200 pages long.. and actually costs about $150.

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Seven years after the bankruptcy, I don't think the reporting agencies can disclose past bankruptcies. I guess some people can be serial bankrupters, racking up debts and stuff and then declare every seven years to the day to "screw" their lenders.
I get the idea that this is more something that business people would be doing, as opposed to low-income earners?

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Yes, it costs money to declare bankruptcy, but in the lead up to it creditors have to stop attempting to collect. You'll need to save up somewhere around 2k US -- a good chunk of cash out of pocket, but it is supposed to be something of an extreme measure.
Most people with debt problems would have no hope of saving up that sort of money.

I find this whole thing incredibly sad.
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Old 11-14-2012, 08:50 PM   #21
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Yeah, I like the idea of it and I'm not saying its a worthless tactic or anything, but it doesn't go away as soon as it's paid off. I went to collects a few years ago over a phone bill (long story short, had a falling out with a roommate, moved out, wasn't able to get back in to get the internet modem which I needed to cancel the amount and she also wasn't paying her half anyway) and it ended up being 500 dollars. Which isn't terribly bad, but I was really underemployed at the time and couldn't afford it.

Anyway, I did end up getting a job at a call centre which usually pays good money and I got it paid off and the credit collector I dealt with when I got the job was actually pretty nice about it (the one I dealt with before would make me cry and have panic attacks). But I still had shit credit, still do really. I was really surprised when I got approved for a cell phone, but I hear Virgin will take anybody and I have a 200 dollar cap on my charges. I've never been able to get a credit card and I've been thinking about getting a bank loan to pay for my last two semesters but I highly doubt I'll be approved.
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Old 11-15-2012, 12:19 AM   #22
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Doesn't it cost money to declare bankruptcy? And after it's all been declared and settled and it's seven years later, don't you still get asked credit companies and places if you've ever declared bankruptcy?
It does BUT you really don't need to file for it unless you have something you are trying to protect. If you have a house, retirement fund, or some stocks or other property you want to shield from creditors then you need to go through the legal process of filing and jumping through all the hoops. Just to file initially a lawyer will charge you about $1,200 - and that number will grow as he has to file more documents depending on what you own.

You can of course just stop paying and let the creditors take you to court. Your assets will not be protected, but sure, if you have no assets they can't do anything and you save the thousands you would have spent on a lawyer.
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Old 11-15-2012, 12:26 AM   #23
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I don't think that things are quite as simple as 'just let them take you to court'... the emotional and psychological toll of having to deal with that would be too intense for a lot of people.
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Old 11-15-2012, 05:11 PM   #24
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That's pretty much what they are counting on.
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Old 11-16-2012, 12:06 AM   #25
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That's it really. You actually don't have to even go to court. It's not a criminal complaint, so you don't get access to a lawyer unless you pay for your yourself. If you do get sued by a creditor and do decide to go to court you will most likely be on your own and it will be a quick case between the suing lawyer and the judge where you just watch without knowing what to do as they basically take ownership of everything you have worth value (house, cars, etc.).

Most people stay home and just wait for the paperwork to arrive instead since it's a futile effort. I mean, if you could afford a lawyer you wouldn't be defaulting on bills sure.

But like I said, if you don't own a home or cars they can't do much. They can't take clothing, jewelry, personal possessions (TV/VCR/washing machines/refrigerators/etc), nor can they take your only means of transportation (if you own a single car it is protected).

Going to court or hiring a lawyer to show up in court or even file for a proper bankruptcy is futile and a waste of money if you don't really have any assets to protect.
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