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View Diary: The Interesting Economics of Rolling Jubilee (92 comments)

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  •  Credit rating (10+ / 0-)

    Discharged debt is still a hit on one's credit rating, so the benefit to the debtor in these cases I guess is just that they won't be pursued by collection agencies any more. That's a not insubstantial benefit, but still no panacea.

    There's about $8.5 billion of charged-off debt, so the potential task is huge.

    Here's an interesting critique of the project:

    http://jacobinmag.com/...

    •  Two points about that article (13+ / 0-)

      1) I think he's right--the goal isn't to buy all the debt.  That's silly.  That's where the third bolded section in my diary comes into play--I think that's where the end game goes to.  

      2)  His advocacy for bankruptcy is ludacris.  Certainly no lawyer would recommend that someone with consumer debt file bankruptcy--talk about a hit to your credit score.  And bankruptcy lawyers are not cheap and come on a retainer.  

      Bankruptcy law is extremely complicated in the post-2005 world by all sorts of things--for instance you can no longer keep your home unless you can make the bankruptcy monthly payment.

      Also any consumer lawyer worth his salt can--for a fraction of the price of a bankruptcy attorney---defend any collection suit successfully.

      •  The credit scores are already toast (2+ / 0-)

        If the owners of the debt are selling it for 5 cents on the dollar, these are debts the owners believe are uncollectible. They have tried to collect and have reported the lack of payments to the credit reporting agencies. A bankruptcy to wipe out the debt would ultimately improve the credit rating of the debtor. I assume that reporting the debt as satisfied would improve a credit score immediately if that is the only delinquent debt the creditor has. If the debtor has many other delinquent accounts, getting one cleared won't make a difference in the credit score.

        •  Don't think so. (2+ / 0-)
          Recommended by:
          G2geek, caul

          The collector is the one who is typically credit reporting them and the credit report is where the credit score comes from.

          No collector, no credit reporting, no reflection in credit score.

          "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

          by Publius2008 on Thu Nov 15, 2012 at 09:52:26 PM PST

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          •  The original lender can report (0+ / 0-)

            Before the debt is charged off and sold to collectors it has already become delinquent.  I'm fairly certain that the lender would be reporting the delinquency regardless of the eventual selling off of the account to a collector.

            "You must be the change you wish to see in the world." -Gandhi

            by Triscula on Fri Nov 16, 2012 at 06:02:30 AM PST

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      •  we need to get progressive churches into this. (11+ / 0-)

        Seriously: this is so overwhelmingly obviously the kind of compassion & generosity that progressive religion is all about.  

        Getting the churches involved would put the Religious Left back on the map like nothing since Martin Luther King's civil rights demonstrations, and would expand the scope of Rolling Jubilee enormously.

        We got the future back.

        by G2geek on Fri Nov 16, 2012 at 01:55:17 AM PST

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      •  but i differ with your third bolded part. (4+ / 0-)

        I think RJ will win on the level of culture war.

        The emotional power of RJ is just enormous.  Giving, forgiving, generosity, compassion, the joy of being liberated from financial terror, the joy of liberating others: these things are as powerful historically as the sight of those black students sitting at the segregated lunch counter while a mob of jeering racists spat on them and threw food at them.  

        This is absolutely revolutionary at an emotional level, a visceral level, and a spiritual level, all wrapped up in one.  

        There is no stopping it.  And the vampires will not just put themselves to shame for opposing it: they will make themselves the targets of scorn and anger and even overt hatred for doing so.  

        If progressive churches pick this up, and spread it as far as it can spread, and then the financial vampires try to pass laws against this, there will be mass actions, civil disobedience on a scale not seen in decades.

        In the end it will move votes and change election outcomes.  And then it will lead to real reforms, written into the law.  

        This truly has revolutionary potential in the full but nonviolent sense of the word.  

        We got the future back.

        by G2geek on Fri Nov 16, 2012 at 02:03:33 AM PST

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    •  That's not quite right (18+ / 0-)
      ...so the benefit to the debtor in these cases I guess is just that they won't be pursued by collection agencies any more.
      You won't be sued. You won't have your paycheck garnished. Discharged debt is a smaller hit to your credit rating than outstanding debt, so you have a better credit rating. And, perhaps most of all, you won't be harassed into paying what you owe, and the penalties they attach (illegally, for the most part) to it, and they can instead use that money (most people do end up paying debt collectors, eventually) to get their lives back on track.

      This is hardly insignificant. And many of these people will not suffer unduly under a credit rating hit, too, so the downside you cite isn't honestly that big a one.

    •  Here's a question I've been meaning to ask (3+ / 0-)

      So, let's say I have some debt a bank has tried to collect on but has failed to do so. Rolling Jubilee buys my debt for five kopeks on the ruble. Do they have standing, as the person who owns the debt, to contact the credit reporting agencies and have the debt removed from my credit report?

      This would be icing on the cake if it could happen. I believe their long-term goal is to find a way to make both consumer debt and the accompanying need for credit agencies irrelevant and eventually extinct, but in the short term removing that perceived blot on one's record would be a wonderful thing.

      The thought that life could be better is woven indelibly into our hearts and our brains. – Paul Simon, "Train In The Distance."

      by Omir the Storyteller on Thu Nov 15, 2012 at 09:30:42 PM PST

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      •  that is my understanding. (1+ / 0-)
        Recommended by:
        G2geek

        I could be wrong, but my reading of it is that RJ has set them up like a collector who simply doesn't collect. they buy the debt, then discharge it. I might be wrong though.

        "Ruin comes when the trader, whose heart is lifted up by wealth, becomes ruler" - Plato, Republic

        by sixeight120bpm on Thu Nov 15, 2012 at 09:32:32 PM PST

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      •  Who has the right to report it? (1+ / 0-)
        Recommended by:
        G2geek

        The collector/owner.  

        Who will verify it if you make the request, as is your right under the credit reporting act?  Not the original creditor, only the current owner can.

        "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

        by Publius2008 on Thu Nov 15, 2012 at 09:56:01 PM PST

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      •  I don't think so (0+ / 0-)

        The fact that you (hypothetically) stiffed the original creditor for 95% of your debt is still on your record. In fact, if you google a bit, you can see statements to the effect that paying off a collection debt will not help your credit rating, i.e., the damage is already done. That you pay off one of these bottom feeders doesn't negate that you walked away from the original creditor.

      •  yes they do. (6+ / 0-)

        Rolling Jubilee, as owner of the debt, has the right to report to the collection agency that the debt was satisfied.  

        They are not obligated to report that the debt was satisfied through an act of charity.

        We got the future back.

        by G2geek on Fri Nov 16, 2012 at 02:05:43 AM PST

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      •  But RJ is giving the freed person (0+ / 0-)

        a paper that says the debt has been paid. Could the person not clear up their credit report themselves? Or, at least challenge the report if it continues to say they owe?

        When lots of people show up to vote, Democrats tend to win.

        by Audri on Fri Nov 16, 2012 at 08:10:08 AM PST

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        •  I'm sure they could, but . . . (1+ / 0-)
          Recommended by:
          Audri

          credit bureaus exist for the benefit of the lendors, not the debtors. Other than rights granted by legislation like the FCRA, debtors get pretty much squat from the credit reporting agencies. A debtor can show proof that the debt was paid, but since it was marked as an unpaid debt to begin with, that ding is still going to be on the credit report. My thought is that as the debtor, RJ can tell the reporting system that the debt needs to be removed from the record and it's more likely to happen.

          That's my thought on the matter anyway. I make no claims to expertise on this subject other than having gotten stuck with a collection claim once after which I did a little (possibly outdated) research, which is why I'm asking.

          The thought that life could be better is woven indelibly into our hearts and our brains. – Paul Simon, "Train In The Distance."

          by Omir the Storyteller on Fri Nov 16, 2012 at 04:19:18 PM PST

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