QuoteMarking 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
Quote from: Jacob on September 17, 2014, 04:17:25 PM
QuoteMarking 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. :cool:
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.
Quote from: Admiral Yi on September 17, 2014, 04:33:04 PM
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.
That's, what, six law degrees? :hmm:
Its about the only positive they've managed to accomplish.
Quote from: Jacob on September 17, 2014, 04:38:59 PM
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.
I would pay off the debt of people from disadvantaged backgrounds who are likely to be successful.
Quote from: Admiral Yi on September 17, 2014, 05:06:17 PM
Quote from: Jacob on September 17, 2014, 04:38:59 PM
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?
Quote from: Jacob on September 17, 2014, 05:14:23 PM
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.
Quote from: Admiral Yi on September 17, 2014, 04:33:04 PM
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.
:hmm: Is debt forgiveness considered an income? :hmm:
Quote from: viper37 on September 17, 2014, 05:38:06 PM
Quote from: Admiral Yi on September 17, 2014, 04:33:04 PM
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.
Quote from: DGuller on September 17, 2014, 06:31:22 PM
:hmm: Is debt forgiveness considered an income? :hmm:
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.
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.
Quote from: Jacob on September 17, 2014, 05:14:23 PM
Quote from: Admiral Yi on September 17, 2014, 05:06:17 PM
Quote from: Jacob on September 17, 2014, 04:38:59 PM
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?
Hint: you and Yi are not rooting for the same team here, even though these debts are no longer the original creditor's problem.
Can you think of *any* issue that is not a matter of rooting for the right team?
Should there be many? Favorite color, favorite number, boxers vs. briefs--pretty much everything else has a moral dimension.
Quote from: Admiral Yi on September 17, 2014, 09:33:11 PM
Can you think of *any* issue that is not a matter of rooting for the right team?
The NHL
Quote from: Phillip V on September 17, 2014, 05:13:42 PM
I would pay off the debt of people from disadvantaged backgrounds who are likely to be successful.
Wouldn't it make more sense to pay for people who are not likely to be successful? I would have thought people who are likely to be successful would eventually have enough money to pay off their debts. :hmm:
Quote from: Scipio on September 17, 2014, 07:39:25 PM
Quote from: DGuller on September 17, 2014, 06:31:22 PM
:hmm: Is debt forgiveness considered an income? :hmm:
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.
I would imagine it's the debt's buyer, not the lender, who would be looking at a tax benefit in a situation like this (the original lender has already realised the tax benefit when he sold off the debt to the debt collection agency). And I don't imagine the Occupy movement would now do that.
The amount of the taxable income for the borrower should, by the way, be equal to the reduced debt's value, not the full debt in a case like this, unless you have insane tax authorities.
Quote from: Martinus on September 18, 2014, 01:04:24 AM
The amount of the taxable income for the borrower should, by the way, be equal to the reduced debt's value, not the full debt in a case like this, unless you have insane tax authorities.
We do have insane tax authorities, and there's some questions here.
http://www.businessinsider.com/rolling-jubilees-tax-problem-2012-11
Quote from: Martinus on September 18, 2014, 12:59:57 AM
Quote from: Phillip V on September 17, 2014, 05:13:42 PM
I would pay off the debt of people from disadvantaged backgrounds who are likely to be successful.
Wouldn't it make more sense to pay for people who are not likely to be successful? I would have thought people who are likely to be successful would eventually have enough money to pay off their debts. :hmm:
A little money does not save those disadvantaged people (suffered from broken homes, addiction, bad K-12 education, etc) who unfortunately were largely handicapped by it. However, those who already managed some success (good K-12 performance, community awards/involvement, teenage jobholder, etc.) rising above a disadvantaged background, the extra money would give them a financial safety net and serve as an accelerant/multiplier for their future contribution to societal wealth and well-being. :)