Bring the Rolling Jubilee?


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I’d been holding this clip over the weekend, before Mistermix mentioned StrikeDebt.org this morning. Rolling Jubilee, “a bailout of the people by the people”, is a Strike Debt project, evolved from the Occupy movement. As I understand it (and I’m open to correction!), this is what the religious activists of my youth called a “(cast your) bread on the waters” charity — on that by definition wasn’t subject to the normal accounting processes. As with giving money to a street beggar, you couldn’t know whether the recipient was ‘worthy’, or if they’d use your donation wisely, or if you’d be better off investing that donation elsewhere.

The Jubilee concept has a long history, and it remains a significant thread in American cultural history, for obvious reasons.

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29 replies
  1. 1
    ruemara says:

    Well. I hope this helps people. But I wonder how this goes wrong somehow. /pessimist

  2. 2
    geg6 says:

    In theory, this is a great idea. People helping people, Americans helping Americans. I admit my laziness in that I haven’t looked at the particulars of this movement, but I would want some kind of accounting for any money I’d donate to anything. If they have some sort of vetting process, I’d not hesitate to give. If they don’t, this is just some typical pie in the sky, airy fairy stuff that makes lefties look like idiots as they get ripped off blind.

  3. 3
    La Caterina (Mrs. Johannes) says:

    My fear is that the movement would end up buying debt that is not legally collectible. I would like to see them buy private student loan debt.

  4. 4
    arguingwithsignposts says:

    it remains a significant thread in American cultural history

    Except for the actual Jubilee part, that is. If it were actually a part of American history, there wouldn’t have been a civil war.

  5. 5
    Ben Franklin says:

    Let’s Jubilee on McConnell’s head……

    My idea is to turn the filibuster into a suspensory veto that would last for no more than one year in a given Congress. This is based on the power of the British House of Lords, which was a model for the Senate and currently has the power to delay most legislation passed by the House of Commons for up to one year. The unrepresentative House of Lords does not possess (though it once did) an absolute veto over most legislation, and neither should a minority of the Senate.

    Here’s how my suggestion would work. Once a bill reaches the Senate floor and a cloture petition is filed, the one-year clock would start to run. This means that the majority party can get its way on any bill or executive nomination so long as cloture is filed by the end of the first session of Congress (e.g., Dec. 31, 2013). Any new measure brought to the floor after that point could be blocked and would have to be reintroduced in the next Congress. This would move the filibuster closer to its original function, which was to prevent hasty action at the end of a Congress.

    http://balkin.blogspot.com/201.....eform.html

  6. 6
    currants says:

    Most of the comments above are addressed on the Rolling Jubilee site. They can’t buy student loan debt, but are looking into buying private student loan debt. They pledge to account for all incoming and outgoing funds on the site. They are buying debt that is headed for collection, and I know a LOT of really smart lawyer-types connected with Occupy, so I’d wager they’re not being fools about it.

    More to the point, I think this totally ROCKS. Maybe only because it’s what I’d do if I were a gazillionaire, but seriously, the folks at Occupy have a strong sense of community and responsibility, and I LOVE ’em for it.

  7. 7
    geg6 says:

    @La Caterina (Mrs. Johannes):

    I think that is a fantastic idea. That would be a good stimulus to the economy because the worst loans to have are the private ones.

    I, personally, would like to see them being excluded from bankruptcy ended, too. I’m torn on the federal loans because, at least, there is a limit to what you can borrow and there are sooooooo many easy payment options, if recent graduates would only use them.

  8. 8
    geg6 says:

    @currants:

    Well, okay, I’ll quit being lazy and look into it further. If it’s a good effort, I’ll be happy to steer the little I have to give to it. Especially now that I’m not steering all my cash to a certain Mr. President.

  9. 9
    Roger Moore says:

    @geg6:
    They promise to have a full account on their web site, so somebody who’s suspicious could wait until they’ve put up some actual numbers before giving anything, or at least before giving real money.

    @La Caterina (Mrs. Johannes):
    It sounds as if their goal is to compete with debt collectors to buy the debt on the secondary market. It’s possible that some of that debt isn’t legally collectable but that the people who owe it are still being harassed over it, in which case keeping it out of the hands of the people who would harass them and try to get them to pay it even though it’s not legally enforceable would still be a real benefit.

  10. 10
    E. says:

    I like it, I but I suspect debt that is available for pennies on the dollar is pretty rank debt that has an extremely low likelihood of ever getting collected and is thus probably not holding anyone down the way many are crushed by their student loans and car/credit card payments. Pennies on the dollar debt, that’s like the five-year old gas bill from when you lived in Topeka. Now fifty-cents on the dollar debt. . . . that’s the stuff that is crushing people into the dirt.

    Wouldn’t it be more sensible to give debtors better power to negotiate? Like FOR EXAMPLE forcing creditors to disclose to debtors how much they have sold their debt for? What’s wrong with that idea?

  11. 11
    currants says:

    @geg6: I hear you–I don’t have much extra this year, and it went to Eliz. Warren, Grayson, and Ohio. And this one doesn’t feel like that (the $$ going to political campaigns makes me sick when I think of the number of homeless kids and hungry kids in this country). So I just sent ’em $20….which buys $400 in debt, and maybe relieves a little stress from someone’s life.

  12. 12
    currants says:

    @E.: Your latter point is, if I read (and recall) correctly, one of the points they make on their website, and one of the goals: to highlight the predatory debt system.

    There are a lot of good resources on that site (Oh, and RJ is a 501c4 org). They didn’t have this idea yesterday, that’s clear.

  13. 13
    E. says:

    @currants

    Yeah okay, you are right, I’ll get off my lazy butt and go read what they have to say. If they mount a campaign to disclose those figures, they can count me in for sure. Thanks for riding my ass about it.

  14. 14
    El Cid says:

    This debt is either bought by debt collection agencies or this type of effort.

    In either case, the party trying to collect has already given up. It’d be nice to avoid getting into that stage in a variety of ways, but obviously many people have already arrived at that point.

    If the opportunity exists to use the dark power of the debt collection agencies against debt itself, why not?

  15. 15
    Redshift says:

    @E.:

    Wouldn’t it be more sensible to give debtors better power to negotiate? Like FOR EXAMPLE forcing creditors to disclose to debtors how much they have sold their debt for? What’s wrong with that idea?

    Nothing wrong with it. Why does it have to be one or the other? Why not both?

  16. 16

    Moral Hazard!

    Oh, pardon me. I’m just looking for Bobo’s irish setter from the Young Fogies Club.

  17. 17
    Anne Laurie says:

    @arguingwithsignposts:

    If it were actually a part of American history, there wouldn’t have been a civil war.

    It was crucially important to the enslaved African-Americans, who used “bring the Jubilee” as both a rallying cry/coded message and as a faith-based argument that holding any human in bondage forever was explicitly un-Christian in a society where observing Christian forms was (supposed to be) paramount. Abolitionists used it the same way. It wasn’t so popular with the slaveowners and their defenders, but then, that part hasn’t changed since the Torah encoded the concept either. IMO, Rolling Jubilee is calling for the same sort of resistance, insisting that poor people have rights that can’t be measured by economists acting as priests of the “Invisible Hand”.

  18. 18
    E. says:

    @redshift and ranchandsyrup

    No no no not because of moral hazard, good grief. Because there is NO WAY that this project is going to make a dent in the problem by simply purchasing debt and because it doesn’t challenge the system by which people are driven under by debt — it just (cleverly) participates in it. That said, I support it anyway on the better to light a candle theory. But if we can force banks to admit to Mr. Smith that they just sold his $5,000.00 debt for $1200.00, he is going to be in a very good position to offer the debt collector $1500.00. Right now, people have only a vague idea their debt gets sold at all.

    It’s just something I’ve been mulling over. I did go to the Website and I don’t see this mentioned there, but that doesn’t mean the OWS people aren’t working on it.

    I’ve been a lifelong hater of debt, have none, and live in a shanty because I could buy it with cash. I feel that debt is a ploy to keep people working for the man forever. I think it causes people to cast away their moral compass and to lose their imagination and sell their very souls. I am a full-blown wild-eyed hippie when it comes to this issue.

  19. 19
    mamayaga says:

    I would love to see more bad debt forgiven, especially since so much is the result of usurious rates and finance charges. Won’t competing with collection agencies to buy bad debt drive up the price of the debt, though? If so, is that good or bad? Might run some of the collection sharks out of business, but also might make them that much more ruthless in their collection efforts.

  20. 20

    @E.: Hi E. I was just joking. Charles Pierce has a running gag about David Brooks’ imaginary irish setter named Moral Hazard. I’m right there with you but I imagine that the old moral hazard chestnut will be thrown out against OWS. Somewhere in between calling them Hippies and wondering whether they use patchouli or the deodorant crystal.

  21. 21
    Ben Franklin says:

    @Anne Laurie:

    See john Brown. His commitment to the right thing, was archetypal, but based on violence.

    Brown went to the gallows cheerfully, confident that his death would serve the abolitionist cause. Cook, however, betrayed his companions with a full confession that implicated fellow abolitionists, forcing Frederick Douglass, among others, to flee to Canada. Brown rejoiced in his martyrdom. Cook nearly managed a spectacular prison escape just before his execution. They were politically united at the extreme, violent end of the abolitionist spectrum. Yet they inhabited different moral and imaginative universes

    http://balkin.blogspot.com/201.....s-spy.html

  22. 22
    pseudonymous in nc says:

    @currants:

    They are buying debt that is headed for collection, and I know a LOT of really smart lawyer-types connected with Occupy, so I’d wager they’re not being fools about it.

    My worry is that the debt-unloaders will see them coming and mark way up from $.05 on the dollar, at which point the multiplier effect goes away. (E. also makes good points about the kind of debt that’s really toxic — the stuff with government guarantees like student loans that serves as a millstone around the neck.) My guess, though, is that the debt-resale market is (alas) big enough to accommodate the demand.

  23. 23
    Roger Moore says:

    @pseudonymous in nc:

    My guess, though, is that the debt-resale market is (alas) big enough to accommodate the demand.

    I’m sure it is. This kind of thing is never going to get bigger than a tiny fraction of a percent of the total debt out there, which will effectively prevent the possible problem of debt forgiveness driving up the value of hard to collect debt. But the people whose debt is discharged this way will genuinely benefit. And since debt overhang is one of the things that’s acting as a drag on the economy, it’s a good thing for the country as a whole.

  24. 24
    currants says:

    @Roger Moore: Yeah! What you said! Over and out.

  25. 25
    Thoughtcrime says:

    A few years back I did some research for a friend that was struggling with his credit card debt. There are internet forums where people give advice, explain how to bypass the 3rd party “settlement” companies and do it yourself, and members also post details of their experiences with the various lenders.

    Not sure about now, but it used to be that many creditors, in particular the credit card companies, would negotiate offers to settle outstanding balances with “hardship” borrowers/cardholders for as low as 15-20% (more typically at 30-60%). They first try to get borrowers to do various payment plans to pay off the whole balance (sometimes forgiving interest), but if one perseveres and goes about it the right way (and doesn’t owe a hard-ass like CapitalOne), they often will settle for considerably less than full. Better than selling it for pennies on the dollar, to their point of view.

    Of course this would hit the borrower’s credit score and the forgiven debt is taxable income for the year it occurs. But it’s a way to pull out of a financial death spiral, avoid bankruptcy, and gives a person the chance to get back on his feet and start rebuilding credit. In many cases it only takes a year or two to rebuild.

    And, of course, the credit card offers keep coming anyway.

  26. 26
    Sister Rail Gun of Warm Humanitarianism says:

    @Roger Moore:

    It sounds as if their goal is to compete with debt collectors to buy the debt on the secondary market. It’s possible that some of that debt isn’t legally collectable but that the people who owe it are still being harassed over it, in which case keeping it out of the hands of the people who would harass them and try to get them to pay it even though it’s not legally enforceable would still be a real benefit.

    Don’t forget that if that not-legally-collectable debt is taken to court and the debtor doesn’t show up to contest the legality of the debt, the junk debt buyer can get a judgement and start the clock over again. It’s not uncommon for JDBs to send incorrect dates to credit agencies to keep the debt from aging off the credit score. And for the most part, the people they’re targeting have no idea how to fight them.

    Even if this accomplishes nothing more than keeping old debt from rising, zombie-like, to pursue people forever, it’s a good thing. A very good thing.

  27. 27
    JoyfulA says:

    @Anne Laurie: Good point. And IIRC bondspeople in the colonies had a six-year term of service. (Bondspeople most often sold themselves for passage money to get to America from Europe. Early on, Africans were treated as bondspeople in the Virginia colony.)

  28. 28
    vernonlee says:

    This is an AMAZING thing and I think people shouldn’t hesitate to give money to them.

    For those who haven’t had the misfortune of figuring out all of this stuff, there’s a very long chain of processes/debt owners, roughly like this:
    1. You go into default.
    2. Your original creditor (OC) starts calling, dunning, etc.
    3. At some point (1-6 months’ delinquency), your OC brings in a Collection Agency (CA) to try to collect. The CA may have bought the debt straight out for pennies on the dollar, or may get a percentage of what they can shake down.
    3. After 6 months, the OC is required by accounting rules to write off the debt.
    4. In the past, at the 6 month mark, the OC would sell off the debt. Nowadays, it’s harder to sell the debt because consumers really, pinky swear can’t pay. And it’s harder to pressure them because of consumer protections written into federal law after the 2006 Democratic sweep. (Thank you Nancy & Harry!)
    5. Either the OC, CA or a new player – the Junk Debt Buyer (JDB) – will continue trying to collect the debt.
    6. Statute of limitations for credit card debt varies by state — usually around 4 years, can be 3, can be as much as 7 years. Any payment in the interim re-starts the clock. Otherwise it just ticks away.

    So with that background:
    A. Debt is sold in tranches where similar customers are grouped together and priced according to its characteristics. For example, if the debt is sold with documentation, it will cost more because it’s worth more — with documentation, you can actually prove your case that you legally own the debt. (Most JDBs will file suit — as stated by a commenter above, sometimes after the statute of limitations have passed — and only bring in a name, address, SSN, dollar amount to court, and if you actually show up to fight them in court and they’re forced to open their manila folder with one piece of paper, they lose.) Debt from certain consumer-friendly states is cheap because likelihood of collecting is low.
    B. It’s VERY unlikely any buyer bidding on a big lot of numbers would ever drive up the price. People wouldn’t compete for one lot vs another, they’d just move on to another of the thousands of lots.
    C. Consumers with this kind of debt outstanding have stopped paying for at least 6 months, perhaps longer. And they are subject to a barrage of calls day in, day out. A JDB will call for awhile, then if the consumer doesn’t ever come to the phone to make a deal, they’ll re-sell the debt and someone new will start calling.
    D. Buying off this debt IS cheap and would have a dramatic impact on someone’s life.

    The one question I have is whether they are able to contact the consumer to say the debt has been permanently retired. Or if the consumer will just infer from lack of calls that nobody’s chasing them any more. Me, I’d want to know.

  29. 29
    Jay in Oregon says:

    @vernonlee:
    The one question I have is whether they are able to contact the consumer to say the debt has been permanently retired. Or if the consumer will just infer from lack of calls that nobody’s chasing them any more. Me, I’d want to know.

    The catch is, some debt collection agencies are scummy enough to start posing as “debt forgiveness” to get people to start picking up their phones.

    And the more resources (read: money) StrikeDebt.org puts into contacting people whose debt has been forgiven, the less debt they can buy. Hopefully, they’ll send a letter to the most recent address of record and call it good.

    That does bring up a good question, though; how does retired debt affect one’s credit worthiness? Not having that debt to worry about is always a good thing, but how long does it take for someone’s credit to recover?

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