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Comment by smeej | Hacker News Reader

Weren't there reports back in the Occupy Wall Street days of people organizing to buy up debt like this and then just forgive it all?

It sounds like debts are sold in such bulk that there's no way to do something very targeted, like starting an org in your town to buy debt from your ZIP and collecting contributions to cancel your neighbors' debts, but if these debts are already only worth 5¢ on the dollar to the sellers, it seems like it would make quite a news story if you could.

If I could buy up $2000 of my neighbors' debt for $100 and remove that burden from them? I think I would, at least occasionally.

But even if you don't assume goodwill, if the whole community knew the plan was to buy and cancel everyone's debt, you could probably get the debtors themselves to band together to do it!

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There are some non-profits specializing in buying up medical debt and forgiving it (e.g. RIP Medical Debt [0]). These non-profits usually rely on individual donations, and $100 can relieve as much as $10,000 of medical debt. They also frequently rely on donations from other organizations such as churches [1]. There are examples of churches buying up tens of millions of dollars worth of debt [2]. I'm not aware of this being done for other kinds of debts, although I would assume it happens.

[0] https://ripmedicaldebt.org/ [1] https://www.cnn.com/2023/04/26/us/debt-jubilee-medical-trini... [2] https://www.bostonglobe.com/2020/10/25/metro/new-england-chu...

Thank you for posting these. I've been looking for a specific way that gives back and I like this route.

I never heard of buying credit debt, but I had heard of people buying medical debt in this manner. I get and respect the medical debt concept. Credit debt though is a tough one. How can you tell that someone ran up credit debt because they were paying for medical bills or something vs debt financing shopping sprees or vacations? Giving those who fall on hard times help is admirable. Giving people bad at personal finance a free ride is not

This strikes me as the same as saying “but the homeless person might take my $5 to buy whiskey instead of a hot meal.”

Or, possibly more apropos to your example, “how do I know my medical debt relief payment goes to someone who truly Deserves It because of bad luck and not someone whose poor diet and exercise habits lead to their stroke?”

The system is designed to turn bad choices into bad luck - and the opposite - and to pass moral judgements on those who need help. Reject the framing and help people; most are good and deserving.

If you want to think of me in that tone, then fine, but I never caveated the medical debt. As the sibling comment to you said, medical debt in a civilized society is just wrong. So I really don't care why the medical care was needed. Helping people out of debt for medical reasons is commendable.

The thing I specifically caveated was people making bad financial decisions on their own. Sure, maybe giving an 18 year old $5k credit limit is not a smart thing on the creditor's part, but not everyone financing retail therapy sessions via credit is an 18 year old. The whole 30 thousandaire outspending their earnings for FOMO or keeping up with the Joneses or whatever does not seem like something we need to bail out.

Frankly the vast majority of people with credit card debt I know still deserve relief. Even people who are under significant credit card debt due to frivolous spending— they likely need therapy or time to budget or similar but now they cannot due to the crushing weight and stress of credit card debt. Or they could’ve been able to pay it off but an emergency happened and they got laid off or they were already barely scraping by and now their car broke down or something.

I think we worry too much about what if undeserving people receive help. Most people are good people who just got caught out on something and could use some help getting themselves out of some goddamn 25% interest craziness.

Robin Hood, robbing the rich to give to the [morally validated].

There's a huuuuge difference from being poor serfs in the feudal lord's fiefdom than someone that can't say no to a sale but can't actually afford it and buys on credit.

Or you can just do charity without deciding you also must be a moral arbiter.

Or you can't do charity that just enables poor behavior and traps people in it.

Not the parent commenter but to chime in: I don't want to be a moral judge but I'd rather give money to someone actually poor than to someone richer than me that just lives beyond their means.

You’ve misread the context so this insult is really out of place.

GP is referring to credit card debt, not medical debt.

I don't think that there was any misreading there. GP is applying GGP's logic to a different kind of debt to make a point.

I said that I wasn't familiar with the concept of buying credit debt, but specifically said I was familiar with buy medical debt. I then compare and contrasted how I feel they are different. I also said that buying credit debt isn't necessarily a bad thing, but due diligence should be applied to whose debt is getting wiped out.

You've spun into something it's not to make a point. Which I'm still not sure what it is

> This strikes me as the same as saying “but the homeless person might take my $5 to buy whiskey instead of a hot meal.”

Which is still a valid point. Don’t give cash to homeless people.

Don't give cash to addicts

Or people who are likely to be addicts, i.e. homeless people.

if you're talking about the random person that approaches you on the street, then yes, that's a high possibility. but there are homeless that are not addicts and don't necessarily live on the streets.

i think this confusion is something holding back progress on homelessness.

When you say “don’t give cash to homeless people” obviously you’re talking about beggars and street vagrants, not whatever demographic some NGO has decided to formally define as “homeless” in order to game the statistics.

First, I didn't say "don't give cash to homeless people" because I do have a very different interpretation of being homeless. The view you take sounds like you've been privileged enough to have never been homeless yourself. I promise you will think of homelessness in a very different manner if you ever have the misfortune of being homeless. I specifically modified the comment to call out addicts.

I have on multiple occasions helped someone out that was facing some very difficult decisions because of not having a place to stay. People that are not addicts can be put in making choices that they would never even consider in a normal situation, but we faced with sleeping in a car/street/public shelter, those choices suddenly start to look more acceptable. Even more so if you have kids.

> First, I didn't say "don't give cash to homeless people"

Sorry, I meant “you” in the general sense, not you personally.

> The view you take sounds like you've been privileged

Stuff it with the personal comments.

> I have on multiple occasions helped someone out that was facing some very difficult decisions because of not having a place to stay.

I have as well. And in my experience, at least with street people, it’s much better to give them bottled water and food than to give them cash. If it’s a family member or someone you actually know, that’s a completely different situation than what most people (not you, to be clear!) are talking about when they say “don't give cash to homeless people”.

>> The view you take sounds like you've been privileged

>Stuff it with the personal comments.

s/privileged/(fortunate|lucky)/

Wasn't meant to be an aggressive comment. A poor choice of words.

Medical debt shouldn't be a thing in a civilized society. Credit card debt is a failure of the financial system to properly assess risk, credit cards shouldn't be that easy to get, and predatory credit card offers should be outlawed. Similar to how identity theft is somehow your problem when it's actually the banks and other systems that enable it.

I’m not sure saying credit cards should be harder to get is the correct stance. I saw a paper talking about the rise of payday loans came at the cost of pawn shops. Basically there is a lot of demand for short term loans, I would argue that better access to credit would help many people greatly.

The only thing I’m unclear on is how to avoid the predatory aspect. I’d assume that part of the usury terms of these kinds of loans is a response to such small amounts. Just paying the hourly cost of dealing with the transaction could put a $200 dollar loan into 5% territory without taking into account any risk profile.

I’d be intereted in running experiments similar to cash giving charities. Measure how much a $2000 line of credit does to improve lives (hopefully without making them worse).

> Giving people bad at personal finance a free ride is not

I get what you're saying but if you've ever gotten to "I now have enough credit card debt for it to be A Problem", the baseline level of stress in your entire life gets pretty high. That doesn't mean that suddenly everyone has "learned their lesson forever", but especially for stuff like "I was bad at personal finance in my 20s, and now I am better but the debt is still around and a problem", helping people with that debt can just make somebody's life much better.

Nothing is guaranteed but if it were a family member and you had a way to clear out some stuff for pennies on the dollar, it feels like the right sort of thing to do.

You've moved the goalposts with making it a family member. What about total strangers?

Student loan debt is an entirely different thing though. I'm still on the fence about student loan forgiveness because I specifically stopped going to school because I did not want to take on the debt. It's a sensitive subject, and I am sympathetic to it. I'd be much more open to 0%, or partial payoff to reduce the obviously bloated amounts the schools are charging.

I didn't mean to move goalposts, and I don't really believe this is something where you can be "right or wrong" about. Just expressing how I feel about it.

The thing I was implicitly thinking is that you might do that for somebody you care about, and ultimately things like debt forgiveness programs are also about giving compassion to people you might not know.

That's a zero sum game. It just increases the value of that debt.

The obvious limitation is that they only sell hopeless debt for pennies on the dollar - no lender will allow a community to buy all of their debt at a significant discount. You'll be able to buy your neighbors' debt only if your neighbour is either a complete deadbeat or their circumstances have changed so much that they are totally bankrupt; every other neighbor's debt won't be for sale.

> people organizing to buy up debt like this and then just forgive it all

Yes indeed - that was the Rolling Jubilee, run by a group called Strike Debt. They apparently still operate, under the name Debt Collective:

https://debtcollective.org/what-we-do/debt-abolition/

I think that works only the first time.

Why? The debt issuer has already written the debt off, why do they care whether it's bought by someone intent on forgiving it?

People are less likely to pay their debts if they think their debts will be sold to someone who will forgive it, so the debt issuer's other non-written-off debts will be harder to collect (since now those people know that they might be able to get out of their debts by waiting and hoping they get sold to a debt-forgiver).

That becomes a problem if debt forgivers become a large percentage of purchasers. It doesn't "only work the first time", it only works as long as you're in a tiny minority, which will likely be forever. The debt issuer won't take notice until the value of their debt starts to drop.

The debt issuer would note that they had to write most of that debt off, so the credit score impact will mean that the same borrower will have a much harder time getting another loan.

Ah, you're interpreting it differently: I took them as saying that you can only buy debt and forgive it once, not that you can only have your debt forgiven once.

John Oliver did that on his show: https://money.cnn.com/2016/06/06/technology/john-oliver-medi...

whoever wants to do that should knock themselves out. OP, just told me it doesn't matter if it gets paid or not at this point.

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