Rolling Jubilee, an outgrowth of the Occupy Wall Street movement, formed to address the issue of consumer debt. The organization focuses particularly on medical debt, as 62% of all bankruptcies are caused by an illness. The non-profit has now taken in nearly $432,000 to abolish more than $8.6 million of debt. This will protect vulnerable debtors, who cannot afford to pay their medical expenses, from being pursued by collectors.
The group has held concerts to raise money and bring attention to its cause, as noted in a recent article in The Times-Picayune – “Praise and criticism for Occupy movement’s Rolling Jubilee debt-elimination strategy.”
The collection agency process is often confusing. Many people do not realize that once a debt reaches an agency, the amount originally owed may be out of the equation. And, what some consumers also don’t know is that many times, money paid to the collection agency will not reach the original creditor. In fact, the collection agency is likely making a huge profit when someone pays the full amount of a debt.
Here’s how it works: the company to which the debt is originally owed wants to take it off its records, so it writes it off as a bad debt and claims it as a loss for tax purposes. The company then sells the debt to a collection firm, often for pennies on the dollar, and for as little as one to five percent of the original figure. The collection firm then contacts the consumer, sometimes using aggressive tactics. The consumer may pay his/her bill in its entirely, but not a cent goes back to the original creditor.
However, Rolling Jubilee will not solve all of a debtor’s problems. While the organization does not pursue collection of the debt, the consumer’s credit score will still suffer. There will be a “black mark” on one’s credit report given that people were delinquent to the point of the loan being sold. This is unfortunate, but perhaps the most important contribution of Rolling Jubilee is the fact that they have raised consumer awareness of the issue.
If you are having issues with debt and debt collection, feel free to contact me for a consultation. I can help you sort out your finances and advise you if and when you should file for bankruptcy. Debt can be confusing and frightening, but I’m here to help.