Approximately three-quarters of Americans are in debt, in most cases due to the high cost of healthcare and education. Nearly two-thirds of bankruptcies in the United States are caused by a medical illness. Such startling figures prompted Strike Debt, a coalition of groups that formed during the Occupy protests on Wall Street in 2011 to take action. The group aims to draw wider attention to what it describes as the “shadowy, speculative market of debt buyers”. It’s a murky world in which debt is bought in anonymous bundles at a fraction of its potential value. These debt buyers then make huge profits by hounding debtors into repaying the full amount.
Strike Debt aims to disrupt the process by setting up its members as debt collectors (a simple process in the US), buying bundles of debt and then writing off the amount owed. The person in debt gets a letter proclaiming: “You no longer owe the balance of this debt. It is gone, a gift with no strings attached. You are no longer under any obligation to settle this account with the original creditor, the bill collector, or anybody else.”
This fire-sale system has allowed Strike Debt to abolish approximately $1,000 of debt for every $50 raised. The organisers say they’re not trying to offer a solution; they’re trying to draw attention to a problem. They are raising some important questions: why is debt being sold at a fraction of its value? Why do banks get bailed out but not people? Why do Americans pay some of the highest costs for healthcare and education in the world? It may be a drop in the ocean, but this bailout of the people by the people can make a big splash.
Marcus Webb is editor of Delayed Gratification, the Slow Journalism magazine which looks back to give the final analysis on stories after the dust has settled, priding itself on being 'Last to Breaking News'.
Laura Hanna, Member of the Debt Collective
USA (New York)