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Sancho Panza

Occupy Activists Buy Up Americans' Personal Debt

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AFP/Yahoo 1/12/13

'For a year and a half, 80-year-old Kentucky resident Shirley Logsdon received repeated calls from a debt collection agency over an unpaid medical bill.Then one day, out of the blue, she received a letter saying the $983 debt had been handled -- purchased by Rolling Jubilee, a group linked to the Occupy Wall Street movement.

"I was dumbfounded but delighted, of course," Logsdon, who is retired along with her husband of 62 years, told AFP.

"We got a letter saying that everything had been resolved -- finally it is over, you don't have to worry, you don't owe us anything. (...) I didn't know these people. It was a godsend."

So what is Rolling Jubilee? The group is an outfit launched just a year ago by former Occupy Wall Street members now grouped under the nationwide Strike Debt collective.

"Together we can liberate debtors at random through a campaign of mutual support, good will and collective refusal," it says on its website, rollingjubilee.org.

The idea? Buy up the personal debt of those who are struggling to fulfill their basic needs, like health care or housing.

For the New York-based group's first anniversary, it announced this month that in one fell swoop it had bought up the equivalent of nearly $13.5 million in medical debt that some 2,693 people owed to hospitals and medical offices.

The group purchased the debt for only $400,000 -- mainly paid for by small donations made to the organization over the Internet.

In the United States, when a bill is not paid within 90 days, a bank can attempt to reduce its losses by selling the loan at a discounted price to professional debt buyers. These are then resold on a secondary debt market.

On its website, Rolling Jubilee says that "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."

According to Strike Debt member Ann Larson, "for every dollar of debt we abolish, we paid only two cents."

The group has no idea whose debt it was purchasing: sales are made anonymously and it's not until the end of the transaction that Strike Debt has access to the addresses to which it will send letters, such as the one it mailed to Logsdon.

Medical bills are one of the leading causes of personal bankruptcy in the United States.

In 2013, one in five Americans will have struggled paying medical bills and more than 35 million people will be contacted by debt collectors, according to a study by NerdWallet, a company specializing in personal finance and credit options.

Logsdon, who was treated in Louisville for a back injury, said she had no idea what was coming financially.

"I was really upset," she said. "Almost $1,000 in debt is unreal when you have Medicare. They usually cover everything."

"I was very embarrassed," she added. "We hit rock-bottom."

Then the reprieve from Rolling Jubilee arrived. The letter said: "It is our belief that no one should have to go into debt for the basic things in our lives such as healthcare, housing and education."

For Larson, the gesture of those who donated "really shows that people help each other and people understand that the debt system we have in America is really wrong."

Next (Frankfurt: NXG.F - news) to tackle on the group's list is student debt. Each year, 60 percent of American students must borrow to pay for their studies.

In September, the burden of student debt was more than $1 trillion in the United States, according to the Federal Reserve.'

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Amazing, I love it. I just hope they keep getting donations to do this.

Medical debt should not exist in a civilized society.

One of the best stories I have read all year.

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One of the best stories I have read all year.

2 cents in the dollar gives you and idea of how overpriced US healthcare is.

http://globaleconomi...et-doctors.html

Unnecessary Surgeries? You Bet! Doctors Treat Patients as ATMs; US Healthcare System Explained in Six Succinct Points

US Healthcare System Greased for Fraud

Medicare pays contractors based on how many claims they approve. Good grief!

Very expensive prostate radiation therapy is conveniently exempt from self-referral laws.

Although physicians in general aren’t allowed to refer their patients for treatment in facilities that they also own (with the exception of radiation therapies), the problem of incentives is universal, across the board.

Physicians paid on an incentive model, like spinal fusion star surgeon Federico C. Vinas, have every financial incentive to perform needless operations.

Every step of the way, the US medical system is greased to perpetuate fraud against taxpayers, against patients, against insurers.

US Healthcare System Explained in Six Succinct Points

  1. A constant battle is underway between insurance companies that do not want to pay any claims, even legitimate ones, and doctors and hospitals incentivised to rip off patients, insurers, and taxpayers with unnecessary surgeries and Medicare fraud.
  2. Insurance companies demand massive amounts of paperwork out of rational fear of fraud and unnecessary treatments. Doctors perform for-profit (as opposed to for-patient) procedures that guarantee more explanations and more paperwork.
  3. Doctors and hospitals have direct personal contact with patients, but insurance companies don't. In cases where doctors put patients at huge risk with needless procedures and surgeries, it's easy for hospitals and doctors to point their finger at insurance companies. On the other hand, many sincere, honest doctors have difficulty getting patients the care they should have because insurers believe they are getting ripped off by unnecessary procedures, even when they aren't.
  4. Doctors make needless tests out of fear of being sued for not doing them.
  5. The vast majority of healthcare costs occur in final last year or so of someone's life. Politicians who want to do something sensible about this issue get accused of "rationing healthcare".
  6. Doctors not only have a financial incentive to prolong life needlessly, they also worry about not prolonging life out of fear of being sued by family members unless there is a living will, and perhaps even if there is a living will.

Read more at http://globaleconomicanalysis.blogspot.com/2013/10/unnecessary-surgeries-you-bet-doctors.html#u7zZftUXc8cc278w.99

Edited by Sancho Panza

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So Occupy are collecting donations for poor bankers who would otherwise have to write off debts as uncollectable? Right on!

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Is there any sort of UK version of this?

+1,

would be interested in donating a bit for students on ""tough" courses.

might only be £10 a month or something but if enough people chipped in then we hopefully get the double whammy of less student debt, and a few people who can innovate our way out of recession.

can't do much about house prices, but we need bums on seats making stuff again to get out of this mess.

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So Occupy are collecting donations for poor bankers who would otherwise have to write off debts as uncollectable? Right on!

While they may be paying the bankers back, they are only paying the market value of the debt which is a fraction of what the debtors are charged.

We need much more of this, there should be a law that where debt is due to be sold at market value that the debtor gets the chance to pay it at the lower amount. Maybe if there was and banks suffered moral hazard the system could clear itself. We are all suffering because of QE and banker bailouts at the same time as they get to charge us for the debt they have been bailed out for.

Recently the UK government sold the oldest student loan debt for a 10th of its value. I am one of those debtors, maybe if they had contacted me I would have paid it back straight away at 10%. As it is because I have a mortgage style student loan and I don't earn 3/4 of the national average(a pie in the sky figure for most) then its going to get wiped out.

I would have paid it just to stop them annoying me each year with letters.

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Amazing, I love it. I just hope they keep getting donations to do this.

Medical debt should not exist in a civilized society.

How would you propose to abolish it?

Medical care costs money. Unless you get lucky in a lottery like our NHS[1], you have to pay. If it's more money than you have, then the choices might be debt vs death.

[1] Everyone's right to die waiting for "free" healthcare.

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+1,

would be interested in donating a bit for students on ""tough" courses.

IMHO a better way to do that is to contribute towards scholarships for good students. Give them the chance to avoid getting into the debt in the first place.

Anything retrospective, it's likely to be harder to distinguish good vs bad debts

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While they may be paying the bankers back, they are only paying the market value of the debt which is a fraction of what the debtors are charged.

The 'market rate' will be going up, if these people keep buying. Besides which, if the borrowers are too poor to pay off a $1,000 bill, I'd be surprised if the debt collectors would get anything at all from them otherwise.

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+1,

would be interested in donating a bit for students on ""tough" courses.

might only be £10 a month or something but if enough people chipped in then we hopefully get the double whammy of less student debt, and a few people who can innovate our way out of recession.

can't do much about house prices, but we need bums on seats making stuff again to get out of this mess.

Yes, I think it would be difficult to know what sort of debtors you were helping, so you might just find that you had to hold your nose a bit in some cases. But I seriously like the the idea of being able to pay off £1 of debt with 2p worth of outlay. As you say, enough people doing a few quid a month would make a difference. If nothing else it would be a polite two fingers to the system.

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Yes, I think it would be difficult to know what sort of debtors you were helping, so you might just find that you had to hold your nose a bit in some cases. But I seriously like the the idea of being able to pay off £1 of debt with 2p worth of outlay. As you say, enough people doing a few quid a month would make a difference. If nothing else it would be a polite two fingers to the system.

+1,

would be interested in donating a bit for students on ""tough" courses.

=====================================

FIFA Coins

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