One Year Later, Occupy Has A Brilliant New Plan for a People's Bailout

[belleweather]

Occupy Wall Street has a great new answer to all the doubters who ripped on them over the past year for not having a specific enough plan.

It took a while, but a new offshoot group that grew out of Occupy called Strike Debt has a highly specific, highly brilliant plan for how to improve the lot of the 99%: It’s called Rolling Jubilee, and it’s

Comments

[clarice_01]

This is such a cool idea. I will actually donate to this! (I usually just donate to Relay for Life.)

[tabaqui]

I think this is amazing.

[sadisticsidhe]

First off I have no mind for economics or finance let me say that.

Secondly, I've read this article several times and maybe the answer is staring me in the face but how do they get the loans? Like they buy the loans or bundled loans and then they cancel it. I got that. They buy the loans using money that people donate. I also got that. How are they buying the loans so cheap? Like if i have 10K in student debt and they go to buy my bundle? loan?, how are the able to buy it for like less than 10k? Why would be debt holder sell it for less than 10k? Or are they only buying part of my loan?

Maybe I'm asking the wrong question...

[temperance_k]

So, I was curious about this as well, and I did some (very quick and light) digging.

Apparently, the key is that the group is buying distressed debt, which is basically debt which has a VERY high risk of default. I'm guessing that due to this high risk, the debt sells for much, much cheaper because there's almost no hope in recuperating the money anyway! So, whoever owns the debt, assuming you want it paid, would really have to hound the person/company in order to get their difference. Instead of spending money and resources to do this when there's little to no chance of it happening, might as well make a few bucks off of the debt.

That's the reasoning, I guess. Full disclosure: I KNOW NOTHING about finance.

[tsu_]

Basically banks normally hold a whole bunch of 'bad' debt (debt that is not regularly paid) which normally has very high interest and low repayment (the customers cannot afford to pay it back) so what they do is randomly pick a couple of awful/extreme-risk loans mix it with some middling/low-mid risk loans and sell it as a 'lot' to debt-collecting companies.

The debt companies (who have debtors + resources to chase and harass the original loan-owners) will buy the debt from the bank at a low price, from the idea that they can make profit if collecting the rest of the high interest

or from their website:

Banks sell debt for pennies on the dollar on a shadowy speculative market of debt buyers who then turn around and try to collect the full amount from debtors. The Rolling Jubilee intervenes by buying debt, keeping it out of the hands of collectors, and then abolishing it.

[sadisticsidhe]

Oh! I think I get it.

Key word there is think.

I guess what was throwing me is I either didn't see or they didn't say that it was high risk debt. So I was like "But why though?" It makes more sense now.

[sunhawk]

Will only Americans be able to donate or can anyone donate? The FAQ didn't say either way. Very interesting idea, hope it works!

[free_spoons]

This idea sounds great. I'd just want them, when the random person gets their "Your debt is now $0" letter to include something about Rolling Jubilee, including how to donate. Image the cumulative effect if everyone who had their debt forgiven still payed 1 payment back to Jubilee to keep the project going?*

*yeah, I know not everyone could or would want to make a donation, but if you didn't know about rolling jubilee until your debt was forgiven, I would bet quite a few would pay it forward.

[squeeful]

Or even just tell other people about it and maybe they could donate.