Occupy Movement Is Alive and Buying Your Debt

BOSTON ( TheStreet) -- Since its forced eviction from the Zucotti Park in New York City at the end of 2011, Occupy Wall Street may have slipped from much of the general public's radar. Not only is the group still alive and kicking, but it has made recent headlines with the success of its ambitious program designed to help abolish some people's personal debt.

Rolling Jubilee, an initiative set up by Occupy's Strike Debt group last year, announced last month that has bought and purged nearly $15 million in other people's personal debt, mostly from medical bills.

"No one should have to go into debt or bankruptcy because they get sick," Laura Hanna, an organizer with the group, told The Guardian, noting that 62% of all personal bankruptcies list medical debts.

Some critics warned that lenders might be reluctant to sell to Strike Debt. Yet so far, that hasn't been the case.

"It hasn't been an issue at all," Mike Andrews, a writer and editor who has been involved with Strike Debt's efforts, told Business Insider. "[The lenders] are happy to get paid any amount for it, and they don't care what happens with it after it's bought."

Occupy says it has achieved its goals so far for mere pennies on the dollar, spending less than a half-million dollars for their return. The outcome so far has exceeded the group's original expectations, which was to raise $50,000 to buy $1 million in debt.

Occupy started Strike Debt as part of an effort to raise public awareness about how the debt market works.

When a bank or lender cannot successfully collect on an individual's debt -- whether from credit cards, loans or medical insurance -- it usually winds up selling it to the "secondary debt market." The companies in this market buy up the debt for basement prices, typically for somewhere around five cents on the dollar.

"Very few people know how cheaply their debts have been bought by collectors. It changes the psychology of the debtor, knowing this," Andrew Ross, professor of social and cultural analysis at New York University and author of the book Creditocracy, told The Guardian. "So when you get called up by the debt collector ... that gives you moral ammunition to have a different conversation."

Since anonymous accounts are often grouped and sold in a bundle, Rolling Jubilee buys debts randomly and without knowing the identity of the persons whose debt they are taking on until after the purchase. Once the debt is bought, the group sends letters letting the individuals know their debt has been forgiven.

One of those debts was owed by Terrance Lavalle, who after years of fighting debt collectors over a $3,000 medical bill was informed his debt had been forgiven by the Rolling Jubilee, according to Yahoo Finance.

The term jubilee refers to historic events in which debts were canceled and people who had been enslaved or sold into indentured servitude were set free. Jubilees were popular during Biblical times, but there have been recent events modeled after them. For instance, Strike Debt noted on its website that Iceland forgave a percentage of people's mortgage debt in the wake of the 2008 economic crisis.

With this in mind, Occupy founded Rolling Jubilee in October 2012 as a 501(c)(4) nonprofit run entirely by volunteers and funded by public donations.

For now, Strike Debt intends to continue with the program as long as they keep getting enough donations to keep it running. The group has even discussed the possibility of eventually buying and abolishing some private tuition debt that hasn't been guaranteed federal government -- loans guaranteed by the federal government are not available on the secondary market -- though no formal plans have been made.

With 77.5% of U.S. households in some kind of debt and one out of seven people actively pursued by a debt collector, the group's success seems tapped a nerve.

"A wondrously simple idea at heart," Forbes contributor Tim Worstall called the initiative in a recent column. "The best most of us can hope for is to make the world better for one or two people through our individual actions: exactly what this program does."

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