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Activist groups buy medical debt, forgives it

A lot of Michigan readers are already familiar with the activist movement Occupy Wall Street. Less well known is the off-shoot group Strike Debt, aimed specifically at advocating for consumers and borrowers struggling with debt. One project of this group has been to buy consumer debt from credit companies in the same way that a debt collection firm would, for pennies on the dollar.

Recently the group bought nearly $15 million in debt for about $400,000. The debt mainly consisted of medical debt, which many know is a leading cause of bankruptcy in the United Sates. Instead of collecting as much of the debt as possible the way a typical debt buyer would, the group simply forgave the debt, informing individuals that their obligations had been satisfied.

This concept is novel if nothing else and presents an interesting way for activists to make a point about debt and debt collection, since they publicize the low cost of forgiving this debt. However, for borrowers who are already in trouble it does not offer a concrete solution to their situation. In addition, the practice may also be ripe for imposters seeking to obtain personal financial information or a social security number by posing as a nonprofit or activist group seeking to buy and forgive debt.

Instead of waiting by phone to get the call that one has won the debt lottery, it is better to take a lesson from these activists. Mainly, that companies are quite willing to settle outstanding debts for less than the total amount and often do when they sell the debt to collections companies. Instead of going through that process, borrowers have the choice to seek help from an experienced advocate to help renegotiate or refinance debt themselves, without high interest rates, penalties, or harassing phone calls.

Source:, "Occupy Wall Street activists buy $15m of Americans' personal debt," Adam Gabbatt, Nov. 12. 2013

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