Occupy Strikes Against Student Debt

[Jacob]

Marking the third anniversary of the Occupy Wall Street movement, the group's Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

http://money.cnn.com/2014/09/17/pf/college/occupy-wall-street-student-loan-debt/index.html?hpt=hp_t2

[mongers]

Marking the third anniversary of the Occupy Wall Street movement, the group's Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

http://money.cnn.com/2014/09/17/pf/college/occupy-wall-street-student-loan-debt/index.html?hpt=hp_t2

Sounds like a very effective initiative.   

[Admiral Yi]

While on the one hand I applaud people putting their money where their mouth is, I don't think this was a very effective use of funds.  The debt was selling for pennies on the dollar because it was unrecoverable--the borrowers were never going to pay it back anyways.

[Jacob]

While on the one hand I applaud people putting their money where their mouth is, I don't think this was a very effective use of funds.  The debt was selling for pennies on the dollar because it was unrecoverable--the borrowers were never going to pay it back anyways.

I'm thinking it is very effective for the people who were saddled with debt they were never going be able to service.

[Habbaku]

That's, what, six law degrees? 

[Darth Wagtaros]

Its about the only positive they've managed to accomplish.

[Admiral Yi]

I'm thinking it is very effective for the people who were saddled with debt they were never going be able to service.

I don't think their situations have changed at all.

[Phillip V]

I would pay off the debt of people from disadvantaged backgrounds who are likely to be successful.

[Jacob]

I'm thinking it is very effective for the people who were saddled with debt they were never going be able to service.

I don't think their situations have changed at all.

No?

I was under the impression that having non-serviced debt on your credit rating record was a bad thing, but that once that debt was discharged your could get on the path of rebuilding your credit rating.

Is that incorrect?

[Admiral Yi]

No?

I was under the impression that having non-serviced debt on your credit rating record was a bad thing, but that once that debt was discharged your could get on the path of rebuilding your credit rating.

Is that incorrect?

You may be right.

[viper37]

While on the one hand I applaud people putting their money where their mouth is, I don't think this was a very effective use of funds.  The debt was selling for pennies on the dollar because it was unrecoverable--the borrowers were never going to pay it back anyways.

Well, the lenders would have never "let it go" simply.  There would have been a legal process, trying to squeeze some money and most of the students ending bankrupt to avoid paying.
Now, their credit rating is intact.
So, I guess, it is a good use of money for this group.  I find it much more effective than sitting around in tents, creating fire hazard, raping girls and knifing each other.

However, in Quebec, given that student loans are guaranteed by the government, I think the lenders would simply call on the government to pay the debt rather than sell it for pennies.

[DGuller]

   Is debt forgiveness considered an income? 

[Jacob]

While on the one hand I applaud people putting their money where their mouth is, I don't think this was a very effective use of funds.  The debt was selling for pennies on the dollar because it was unrecoverable--the borrowers were never going to pay it back anyways.

Well, the lenders would have never "let it go" simply.  There would have been a legal process, trying to squeeze some money and most of the students ending bankrupt to avoid paying.
Now, their credit rating is intact.
So, I guess, it is a good use of money for this group.  I find it much more effective than sitting around in tents, creating fire hazard, raping girls and knifing each other.

However, in Quebec, given that student loans are guaranteed by the government, I think the lenders would simply call on the government to pay the debt rather than sell it for pennies.

Yeah, the article said it was only an option for "private debt" not backed by the government. Most student debt in the US is government backed as well, I believe.

[Scipio]

  Is debt forgiveness considered an income? 

Bingo.

I always tell my debt forgiveness clients that they're going to get a 1099 from the lender who forgives their debt.

Guess who they call to bitch about, when they get that 1099? It ain't the fucking lender.

But the lender doesn't have to report it. If they're not looking to get the tax benefit of writing off the debt, then they are not obligated to report it at all.

[Ideologue]

Iirc, it's not like having an imputed income of $200k actually puts you in a worse position than the debt... unless you have non-exempt assets to take, in which case, the fuck?  The IRC has an insolvency provision for such people.