How to strike debt

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Strike Debt! - Debt Resistance for the 99%

strikedebt.org/‎

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You are not a loan. Strike Debt is a nationwide movement of debt resistors fighting for economic justice and democratic freedom. Debt is a tie that binds the 99%.

‎Rolling Jubilee - ‎Strike Student Debt, Not Just ... - ‎Why can't you buy my debt?




Rolling Jubilee

rollingjubilee.org/‎

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A bailout of the people by the people. Rolling Jubilee is a Strike Debt project that buys debt for pennies on the dollar, but instead of collecting it, abolishes it.

Occupy Wall Street's debt buying strikes at the heart of capitalism

In buying debt so cheaply and writing it off, Occupy has revealed the illusory and circular nature of owing money

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• • Alex Andreou
  • theguardian.com, Wednesday 13 November 2013 16.20 GMT
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The Occupy Wall Street movement, through its Rolling Jubilee project, had bought up and scrapped medical bills for more than 2,600 people. Photograph: Spencer Platt/Getty Images

Across the United States, 2,693 people have received a letter in the last few months, which identified a debt and read: "You are no longer under any obligation to settle this account with the original creditor, the bill collector, or anyone else." This is the work of the Rolling Jubilee project – a non-profit initiative which buys personal debt for pennies on the dollar in the secondary market (where debt is sold to companies who then resell it to collection agencies) but then simply cancels it.

When the Occupy movement came into being in the summer of 2011, its critics said that a lack of identifiable objectives and strategy for achieving them meant it was doomed to fail. This was a monumental underestimation of its potential impact. Two years on, the debate about the ethics of corporate capitalism in its current form, the fairness of the remuneration of those at the top, the widening wealth gap and the morality of tax avoidance is alive and well. The concept of the "99%" is now part of the collective consciousness. All this is, in no small part, down to the fuse lit by the Occupy movement.

However, another significant aspect of the movement – dismissed as being woolly – was that it brought like-minded people together and allowed a dialogue which identified common strands. This appears to have evolved into several focused and practical initiatives. One of the most significant, and perhaps the most threatening to the status quo, is the Strike Debt group, of which the Rolling Jubilee project forms part.

The idea is that, those freed from debt and those sympathetic to the movement, then donate into the fund to keep it "rolling" forward; hence the name. The fund has already raised $600,000 and has used $400,000 of this to purchase and cancel an astonishing $14.7m of debt, primarily focusing on medical bills. This strikes at the very heart of the system, not only by using its own perverse rules against it, but critically by revealing the illusory and circular nature of debt.

Capitalism requires a layer of cheap, flexible labour to operate optimally. It is not a coincidence that the most successful global economy, by any traditional capitalist measure, is an authoritarian quasi-communist state. Many, myself included, have been arguing that our current predicament is not crisis-consequent austerity, but a permanent adjustment. David Cameron on Monday confirmed as much. The great lie, peddled by Thatcher and Reagan, was the idea that we could all be middle class, white-collar professionals within a neoliberal economy. It was simply not true.

David Graeber, one of the original members of Occupy Wall Street writes: "[A]lmost immediately we noticed a pattern. The overwhelming majority of Occupiers were, in one way or another, refugees of the American debt system … The rise of OWS allowed us to start seeing the system for what it is: an enormous engine of debt extraction. Debt is how the rich extract wealth from the rest of us, at home and abroad." Western capitalism is running out of serfs, slaves, colonies, immigrants, child labour and women as chattels. A new underclass must be created. Debt is the weapon of choice. Medical bills underlie more than 60% of bankruptcies in the US. The level of student debt has reached an eye-watering $1.2tn.

This is why the debate on the back-door privatisation of medical and education services in this country matters so much. The extraction of profit from these two key areas changes the social contract in a fundamental way. The idea is no longer that the state will educate you and keep you healthy, so that you may continue to contribute with both your work and your taxes. It has mutated instead into "you will borrow money from the state's private partners in order to become educated and stay healthy, so that you may continue to contribute to their bottom line". All of the 99%, in a very real way, work in part for an assortment of financial institutions, largely invisible and certainly unaccountable.

Iceland's – strangely unreported – decision to write down mortgage debt for its citizens, undermines that notion. A rejection of traditional systems of credit and money as a response to austerity, such as in the barter markets of Volos in Greece and Turin in Italy undermines that notion. The Rolling Jubilee project undermines that notion in a significant way, by asking the sizzling question: "If a corporation is prepared to accept five cents on the dollar in exchange for our debts, if that is our debt's open market value, how much do we really owe?"

And if your instinct is to point out that $15m is so small a drop in the ocean as to be insignificant, my response would be: not to the 2,693 people who received that letter. The sparkle of a lit fuse is, by its nature, humble.

http://www.theguardian.com/commentisfree/2013/nov/13/occupy-wall-st-debt-buying-heart-capitalism

Occupy Wall Street activists buy $15m of Americans' personal debt

Rolling Jubilee spent $400,000 to purchase debt cheaply from banks before 'abolishing' it, freeing individuals from their bills

• How could Brits do the same thing?
• Occupy Wall Street's debt buying strikes at the heart of capitalism

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• Adam Gabbatt in New York
• theguardian.com, Tuesday 12 November 2013 15.34 GMT
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'Our primary purpose was to spread information about the workings of this secondary debt market,' said Andrew Ross. Photograph: Spencer Platt/Getty Images

A group of Occupy Wall Street activists has bought almost $15m of Americans' personal debt over the last year as part of the Rolling Jubilee project to help people pay off their outstanding credit.

Rolling Jubilee, set up by Occupy's Strike Debt group following the street protests that swept the world in 2011, launched on 15 November 2012. The group purchases personal debt cheaply from banks before "abolishing" it, freeing individuals from their bills.

By purchasing the debt at knockdown prices the group has managed to free $14,734,569.87 of personal debt, mainly medical debt, spending only $400,000.

"We thought that the ratio would be about 20 to 1," said Andrew Ross, a member of Strike Debt and professor of social and cultural analysis at New York University. He said the team initially envisaged raising $50,000, which would have enabled it to buy $1m in debt.

"In fact we've been able to buy debt a lot more cheaply than that."

The group is able to buy debt so cheaply due to the nature of the "secondary debt market". If individuals consistently fail to pay bills from credit cards, loans, or medical insurance the bank or lender that issued the funds will eventually cut its losses by selling that debt to a third party. These sales occur for a fraction of the debt’s true values – typically for five cents on the dollar – and debt-buying companies then attempt to recoup the debt from the individual debtor and thus make a profit.

The Rolling Jubilee project was mostly conceived as a "public education project", Ross said.

"We're under no illusions that $15m is just a tiny drop in the secondary debt market. It doesn't make a dent in the amount of debt.

"Our purpose in doing this, aside from helping some people along the way – there's certainly many, many people who are very thankful that their debts are abolished – our primary purpose was to spread information about the workings of this secondary debt market."

The group has focussed on buying medical debt, and has acquired the $14.7m in three separate purchases, most recently purchasing the value of $13.5m on medical debt owed by 2,693 people across 45 states and Puerto Rico, Rolling Jubilee said in a press release.

“No one should have to go into debt or bankruptcy because they get sick,” said Laura Hanna, an organiser with the group. Hanna said 62% of all personal bankruptcies have medical debt as a contributing factor.

Due to the nature of the debt market, the group is unable to specify whose debt it purchases, taking on the amounts before it discovers individuals’ identities. When Rolling Jubilee has bought the debt they send notes to their debtors “telling them they’re off the hook”, Ross said.

Ross, whose book, Creditocracy and the case for debt refusal, outlines the problems of the debt industry and calls for a “debtors’ movement” to resist credit, said the group had received letters from people whose debt they had lifted thanking them for the service. But the real victory was in spreading knowledge of the nature of the debt industry, he said.

"Very few people know how cheaply their debts have been bought by collectors. It changes the psychology of the debtor, knowing this.

“So when you get called up by the debt collector, and you're being asked to pay the full amount of your debt, you now know that the debt collector has bought your debt very, very cheaply. As cheaply as we bought it. And that gives you moral ammunition to have a different conversation with the debt collector."

http://www.theguardian.com/world/2013/nov/12/occupy-wall-street-activists-15m-personal-debt

Can I buy debt like the Occupy Wall Street activists did?

The pressure group has paid off $15m of other people's debt, after buying it up for just $400,000. Can we do that in Britain – and, if so, how?

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An Occupy Wall Street demonstrator … the group has put its money where its mouth is. Photograph: Reuters

It sounds like the ultimate good deed – paying off the debt of someone you don't know who is in desperate financial straits and keeping bailiffs from their door. Activists from Occupy Wall Street have paid off $15m in mainly medical debts of hundreds of Americans, at a cost of just $400,000. The more charitable among us are wondering if we can follow their example and help some poor victim of Britain's "Wonga economy" in the run-up to Christmas. But how feasible is it?

Well, you can't pitch up at Lloyds and ask to help out its most vulnerable or heart-rending cases. The way this process works in the UK is that the banks (or the utility company, or even the local council) will chase a debt multiple times – endless phone calls, scary letters, threats of legal action and so on. Mostly, they get their money back. But around ￡8bn a year escapes them, and it is these hardcore cases that are written off by selling the debt on to the highest bidder, who buys it at a reduced price, then puts the debtor through the wringer once again.

Typically, these third-party debt-chasers pay 10p for every ￡1 of debt bought and expect to claw back about 20% of the debt. It's a profitable business, worth around ￡800m a year and, largely, the banks only deal with big players who can buy up some of their toxic debt packages in one go.

The darkest corner of the debt market contains the bottom-fishers who buy the debt that the more visible and scrutinised players give up on. So the cycle of hassle begins yet again – from a firm the debtor has never heard of. In theory, a group of well-meaning individuals could at this point set up their own company, buy these debts and cancel them. Which means, finally, the indebted person would have the wolves called off – and the charitable group, such as Occupy Wall Street, could claim it is abolishing millions of pounds of debt for much much less.

http://www.theguardian.com/world/shortcuts/2013/nov/13/can-i-buy-debt-like-occupy-wall-street