Rolling Jubileeis a Strike Debt project that buys debt for pennies on the dollar, but instead of collecting it, abolishes it. Think of it as a bailout of the 99% by the 99%.
A group of campaigners linked to the Occupy Wall Street movement is buying-up distressed loans for pennies in the pound and cancelling them to “liberate debtors at random”.
The Rolling Jubilee project is seeking donations to help it buy-up distressed debts, including student loans and outstanding medical bills, and then wipe the slate clean by writing them off.
Individuals or companies can buy distressed debt from lenders at knock-down prices if it the borrower is in default or behind with payments and are then free to do with it as they see fit, including cancelling it free of charge.
As a test run the group spent $500 on distressed debt, buying $14,000 worth of outstanding loans and pardoning the debtors. They are now looking to expand their experiment nationwide and are asking people to donate money to the cause.
David Rees, one of the organisers behind the project, writes on his blog: “This is a simple, powerful way to help folks in need – to free them from heavy debt loads so they can focus on being productive, happy and healthy.
“Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program live and nationwide, buying debt in communities that have been struggling during the recession.”
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What is Strike Debt?
Strike Debt is an offshoot of Occupy Wall Street. First started in New York City, but inspired by movements around the globe, Strike Debt now has affiliates across the country. We believe people should not go into debt for basic necessities like education, healthcare and housing. Strike Debt initiatives like the Debt Resistors’ Operations Manual offer advice to all kinds of debtors about how to escape debt and how to join a growing collective resistance to the debt system. Our network has the goal of building a broad movement, with more effective ways of resisting debt, and with the ultimate goal of creating an alternative economy that benefits us all and not just the 1%.
Can you abolish my debt? There is no way to seek out a specific person and buy that person’s defaulted debt. With 15% of Americans currently being pursued by a debt collector, looking for one person’s debt would be like looking for a needle in a haystack. Anonymous accounts are bundled together and sold as a whole. Before purchasing debt, there is only limited information as to whose debt we are buying. These peculiarities are part of the scandal that we are trying to highlight.
Is this legal? Yes! What should actually surprise everyone is the fact that it is legal to trade in people’s misfortune. As part of the deregulation of the finance industry, the government made it legal to buy and sell charged-off debt.
Will the Rolling Jubilee have to file a 1099-C Cancellation of Debt form with the IRS?
No. The Rolling Jubilee will earn no income from the lending of money and is therefore exempt from filing a Form 1099-C under the Internal Revenue Code Section 6050P.
What is a jubilee? Jubilee comes from many faith traditions including Judaism, Christianity and Islam. A jubilee is an event in which all debts are cancelled and all those in bondage are set free. It worked in Biblical times and it can still work today. For example, a kind of jubilee happened in Iceland after the 2008 economic crisis: instead of bailing out their banks, Iceland canceled a percentage of mortgage debt. What these examples show is that debts are just a promise which can – and should – be renegotiated or cancelled when the circumstances warrant. Strike Debt believes that now is the time for a jubilee for the 99%.
How Does Rolling Jubilee Work? 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. The Rolling Jubilee intervenes by buying debt, keeping it out of the hands of collectors, and then abolishing it. We’re going into this market not to make a profit but to help each other out and highlight how the predatory debt system affects our families and communities. Think of it as a bailout of the 99% by the 99%.
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Tags: Anti-poverty strategies, Jubilee, Year of Mercy
