Banks want people to be in debt. We know this. It’s how they make their money. But after a certain period of time without repayment, debt stops being profitable. After a little while longer, if a bank is pouring resources into monitoring a debt, and trying to collect on it with no returns, they actually start to lose money.
This is the point at which the bank will sell these bad debts to collection agencies for pennies on the dollar. They cut their losses and move on.
Strike Debt, an Occupy Wall Street offshoot, discovered that there’s no legal requirement for the bank to sell the debt to a certified debt collector. Pretty much anyone can buy the debt if they want to. So Strike Debt started raising money, buying debt, and forgiving it.
Before you ask, no, you can’t request that they buy your debt. They buy it in bundles with no preferential treatment.
Strike Debt is holding a pretty awesome looking variety show on Thursday, November 15 in New York to raise funds. Guests like Lee Renaldo from Sonic Youth, and Comedy Central's Lizz Winstead are on the bill. Tickets range from $25, which will abolish an estimated $500 worth of debt, to $250, which will abolish an estimated $5,000 worth. If you can’t make it in person, you can watch the event online here.
The hope is that people who find themselves suddenly freed of the burden they’ve been struggling under will pay it forward by contributing to Strike Debt so the cycle can continue.
Debt keeps millions of Americans from fulfilling their potential both creatively and intellectually by keeping them chained to jobs that will pay the bills. It holds back economic recovery, because people who could be starting new companies or inventing new technology have to go to their office job every day to pay back the banks.
One of the group’s founders, Astra Taylor, wrote in The Nation, "As individuals, many of us are in debt because we have to borrow to secure basic social goods — education, health care, housing and retirement — that should be publicly provided. Meanwhile, around the world, debt is used to justify cutting these very services, even as the game is further rigged so that the 1% continues to profit, raking in money from tax cuts, privatization schemes and interest on municipal and treasury bonds."
Whether it’s a political rebellion or an altruistic gesture of compassion, Strike Debt is offering a new way to tackle this country's debt crisis from the ground up, without the banks.
I couldn’t bring myself to get excited about Occupy Wall Street, even though I agreed with a lot of the movement's central ideas. There was a time when I thought I should care, both as a young person who wants reform and regulation in the financial sector, and as a journalist. But I didn’t. Something about a bunch of people announcing their dissatisfaction to the world — demanding that everything change and yearning for utopia without offering realistic ways to get there — rubbed me the wrong way.
But this clever, effective way to actually solve the problems this country is facing, rather than just complaining about them, might just change my mind. Strike Debt not only proposing realistic solutions to real problems, they’re actually taking direct action to make a difference.