Movement under way to forgive Americans' personal debt

By Stephanie Grimes | Posted - Nov 21st, 2012 @ 9:58am

NEW YORK — An offshoot of the Occupy Wall Street movement is aiming to erase the personal debt of Americans.

Strike Debt created the Rolling Jubilee as a way to find relief for Americans, who as consumers are $11.4 trillion in debt. The student loans, medical debt, credit card debt and mortgage bills are burying Americans, according to the movement's leaders, so the solution, they say, is to wipe it out.

The idea is based on the biblical institution of the jubilee, which was a year during which debts were forgiven and indentured servants were released from bondage. The Rolling Jubilee plans to buy debts on the debt market and pay them off, sending the debtor a certified letter notifying them that their debt has been forgiven.

"Basically what we're going to do is exactly the same as what a regular debt buyer would do, with one big difference," Thomas Gokey, an artist and teacher, told The New York Times. "Rather than collect the debt, we're just going to abolish it."

Debts on the debt market can be bought for pennies on the dollar, so the $300,000 the group has raised so far could in theory erase $6 million in debt. The group is focusing on medical bills first but hopes to move on to student loans and credit card bills later on. They say they have already forgiven $100,000 in medical debt.

The project does face challenges, according to CNN Money. Buying debt is a tricky process, and banks are not usually willing to sell debt to anyone but a trusted buyer. But Strike Debt told CNN they have found sympathetic ears in the industry that have been willing to help.

"You'd be surprised," Aaron Smith, one of the Jubilee's organizers, said. "I certainly was."

As far as taking steps toward erasing consumer debt as a whole, the project isn't likely to make a very big dent. But that's not the point, according to organizers. They say they want to start a conversation about what they view as predatory lending practices.

"I want to make it really clear that what we're doing here is not charity," Smith said. "It's not debt forgiveness. It's a political statement about what we view to be odious debts."

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