Apparently, select debts (read: high risk) can be bought cheaply from banks and debt collectors. Around $30 worth of debt for every $1. Their plan is to take on this burden from the banks and collectors, and just.. absolve it. Marked "Paid in full" (so they get the full credit report benefit). The site says they're not picking and choosing who gets absolved, it's all random. So no, you can't write in and ask for a couple hundred bucks off your car payment.
Now, while they say that debt can be purchased at a 30:1 ratio, when you donate it's more like 20:1.
And so on. I imagine this is because people need to get paid along the way, transaction fees, etc. You know, things that prevent the people absolving debt from going into debt themselves.
I'm sure a little bit of relief goes a long way, but the consumer debt is about $11.44 trillion (And the outstanding "past-due" debt is around $796 billion). I doubt they intend to absolve America's citizens in one night, but man-oh-man, is there a lot of work to do.
Thoughts, Tested? Is buying (and in turn, increasing value on) debt a good idea? Or is something like this fine when it's targeted at those who can probably never escape it (meaning: that value of this kind of debt might never substantially increase)?
Personally, I just don't know. IANAE.
Ha, well this is quite the odd move.
The randomness bothers me a bit, would it not be better for them to go after the low incomes? Even then is it fair and would it not just make people get more silly purchases knowing that they will be helped out?
Again odd move.
@Rallier: from what I understand about the process, you buy the debt in bundles. So you don't really get hand-pick anything. Which is what makes the debt so cheap. It's kind of like a booster pack for a collectible card game, except instead of a foil card, it's the likelihood of repayment.
Okay, I'm intrigued. I'm going to need more information than they're providing before I'm giving them anything though.
@Bane: totally fair. It's weirdly vague.
This sounds very interesting, but I definitely want more info.
Good on Occupy for starting something that will have tangible, real-life effects though.
Occupy Wall Street, the same phenomenon that was rife with college graduates that couldn't find jobs because they majored in liberal arts and philosophy? The same people that wanted food stamps to feed their cats?
Whatever, if they can help the nation's debt crisis more power to them. But I wouldn't trust these guys with my money though.