The Rolling Jubilee

The Occupy Wall Street movement is trying a new tactic to help folks struggling with debt burdens. Banks and other financial traders buy debts from each other for pennies on the dollar, but still try to collect every bit of it plus interest from the debtor. There's no reason that those debts can't be bought up by someone who doesn't expect to profit from them.

Now OWS is launching the ROLLING JUBILEE, a program that has been in development for months. 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!

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.

The project will officially kick off with a benefit variety show November 15th in New York City. Link to story. Link to website. -via Jason Kottke

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Hi Miss Cellania, I hadn't considered debtors buying back their own debt. To some degree, many lenders are willing to work with debtors on this by lowering interest or sometimes accepting a partial payment, though nothing on the scale of 28:1 such as when they sell the debt to investors. One problem I can see with the suggestion is that most people would not pay their original debts. They would just wait until the institution they owed was willing to accept pennies on the dollar. When that started happening, institutions would stop lending to people unless their credit scores were extremely high or require some form of collateral. This would harm the least credit worthy, as defined by their FICO score, members of our society by forcing them to use other methods to get access to cash, such as loan sharks.

My reference to people being upset was due to the second sentence of your article, I interpreted the tone as it was immoral for an investor to expect someone to pay their debts.

By the way, thank you for this and the many other articles your share on Neatorama. It’s always a pleasure to learn something new about the world or see something I’m familiar with in a different light.
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I don't see anyone upset about that. But it made me think. If a bank or an organization like OWS can buy up $14,000 of bad debt for $500, why can't the debtor buy it for the same price?
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Bully for Occupy Wall Street but I'm not sure why people are upset that banks and financial traders expect debtors to pay back their loans with interest. When you get a loan, you agree to the terms listed by that institution, which include interest. If that institution transfers ownership of the debt, it doesn't absolve you of the debt or the interest, and you now owe the investor who bought your debt. So long as they use legal methods, they are not doing anything wrong by asking you to repay that debt.
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