Occupy Wall Street Eliminates $15 million of Debt

Since the protest started in Zucotti Park in New York City near the financial district, the Occupy Wall Street movement has done a lot to raise awareness of the iniquities and corruption in the American political and economic system, whilst receiving biased mass-media editorializing and suffering undue violence from the local police. Since November 15, 2012, the Occupy movement started a program of debt-relief called “Rolling Jubilee,” which seeks to bailout individuals who have accrued debt through credit cards as well as medical bills. To date they have relieved millions of dollars in debt for just pennies on the dollar.

VIA Guardian

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 spending $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.”

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  • InfvoCuernos

    Wow, Its amazing how much good can be done when people forget about “making a profit”.

  • Rhoid Rager

    The banks still got $400,000 out of this deal. And for institutions that make money from thin air, when it’s $400,000 from the serfs, that’s a solid $400,000.

    • DeepCough

      You have a point, but at the same time, I know those banks and creditors would have much preferred the $15 million, because to them, $400,000 is like Richie Rich’s monthly allowance.

      • Rhoid Rager

        I think a more effective grass roots resistance movement against the bank would be to teach people how to avoid creditors altogether. Rather than just buy out their debt and forgive them (despite being a powerful moral token of social solidarity), they ought to be giving teach-ins about how to move to other districts to avoid creditors, encourage bank runs, and other financial guerilla war tactics. That would be revolutionary.

        • DeepCough

          Maybe the Strike Debt program is just the first stage of the offensive.

          • Rhoid Rager

            I’m almost certain they are.

    • Haystack

      Yeah, but every dollar the banks don’t get back is $10 they can’t loan out.

      • Rhoid Rager

        Actually loans are brought into existence based on reserves held (albeit multiplied, at least, by 10 fold, as you suggest), not from previous debt that has been completely ‘paid off’. When someone ‘pays off’ their debt, the debt is simply cancelled out on the books of the bank. The only thing of value in the deal was the mortgaged house or collateralized car purchased with the bank credits conjured from nothing.

        • Haystack

          When a loan is repaid, though, doesn’t that money go back into the bank’s reserves?

          • Rhoid Rager

            Nope. Because it was never taken out of the reserves to begin with. Repaying debt obliterates it completely, because it never existed from the get go. Reserve rate requirements were convenient metrics for banks to know their limits. But that doesn’t change the basis of the system–the money loaned out is typed into existence. It’s simply bookkeeping fraud–writing in a credit to exist now based on as-yet-to-be-earned income, based on the pledge of a debtor. The ‘fractional reserve’ thing is financial doublespeak that has aligned itself with the socially-expected momentum of growth over the past 150 years or so to make it sound respectable and legit. When we allow our monetary system to be debt based, and accept that money holds its value forever (unlike everything else in the known universe), then what we see happening in the world now is inevitable. I recommend the book Sacred Economics. It’s available online for free at Charles Eisenstein’s Web site.

          • Haystack

            The way I’ve been understanding it is…I’m a bank with a $100 reserve. That means I can loan out a maximum of $1000 in money that I type into existence.

            If I loan out $500 (that I create) and get back $600 with interest, then my reserve becomes $700 and I can now create $7000 in new money. Likewise, if the loan never gets repaid at all, then I’m left with the original $100 and thus only $1000 in lending power–a $6,000 “loss.”

            Is that wrong?

          • Rhoid Rager

            Alright, you’re a bank. Only deposits (money accounts and other investments included) are your reserves. The interest on loans ‘repaid’ is your profit. You don’t have the money you loan out–you’re empowered as a lending institution by the government based on what you hold in other people’s deposits. You ‘loan’ out money that doesn’t exist–and this loan doesn’t take from those deposits (since they’re all insured by the Federal Government anyway). The loan principle is cancelled out on your books when it’s ‘paid back’ by the debtor. The principle goes back to whence it came–from nothing. That’s the rub of it all….the loans don’t exist except on paper. They don’t have intrinsic value. Technically I could convert all my loans from you into paper currency, use that currency to buy something of useful value–a hidden underground bunker, let’s say. Then say ‘fuck you, I’m not paying’ and disappear into my underground bunker. You wouldn’t have a loss on your books, because it’s not a liability to you, unless you packaged up your loan to me and sold it on the derivatives market. Which, of course, you and your ilk have been doing since financial deregulation in the 70s, you defrauding bastard.

          • Haystack

            Ah, okay. The reserves are only deposits and have nothing to do with profit/loss from loans. Thanks for clearing that up.

            Sounds like the best way to screw the banks, then, is just to withdraw your savings and bury it in your back yard. *grin*

          • Rhoid Rager

            bank runs are the only thing that’s gonna fuck with this system. the Fed can print and print and print away all of the destroyed debt, but when the masses actually want their own money back (which is how all Ponzi schemes collapse), then that’s when shit starts to move. people think it’s a bad thing because only those that make it to the bank first will be able to get their money out, but removing a deeply-embedded parasite from the body always involves pain. People gotta learn to start sharing and working together again. As the 2002 Crabwood crop image said, ‘much pain, but still time.’

          • kowalityjesus

            Isn’t the only force that works against the increase in ‘total debts held by everybody’ the people that default on their loans? These people are giving more to the economy than they are taking, unlike the people who dutifully pay off their loans who are taking more (to pay off loans) than they are giving.

          • Rhoid Rager

            Fuck yeah. Paying them off only encourages them (the banks), and, as you insinuate, takes from some other place in society or our ecosystem at large. Repaying loans at interest is simply tribute for the benefit of using their financial ‘innovation’ arranged with the help of their government muts. It’s disgusting. All banks are frauds. The ‘deadbeats’ who don’t pay are helping the system. That’s why I say there needs to be a grassroots movement to educate for a generation of ‘deadbeats’. Debt repudiation is the only solution. (‘course, anarchists have been saying this for over 160 years…)