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The People's Bailout

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Re: The People's Bailout

#101

Post by potatolicious »

marknutter wrote: post #76
sliverstorm wrote: post #69

Earlier quoted context omitted.

The difference in opinion usually winds up being, one party believes medical attention is a basic human right and should be free for everyone. The other party does not.

Well, it's beside the point. For now, medical care costs money, and people rely on that money for their livelihood, and simply walking away from that debt is wrong.

The cost of medical care in the US is structured to account for bankruptcies - the hospitals get paid in aggregate. The real suckers here are people who actually pay for the care, because they've now paid several multiples of the real cost of the care to account for the people who couldn't afford this ridiculous number and went bankrupt.

The morality behind medical finance in the US is not nearly as clear cut as you think it is.

> "Well, it's beside the point."

It really isn't. It comes down to the core of the issue.

What we have is an industry that collectively charges many times the actual cost of delivering their service and have a monopoly on performing a critical service (licensing, certification). Whether or not this is acceptable hinges hugely on whether or not you believe access to this service is a fundamental right.

There is no way, for example, that we would accept a similar situation if the product in question was fresh water or air.

Re: The People's Bailout

#102

Post by eupharis »

RyJones wrote: post #93
philwelch wrote: post #89

Earlier quoted context omitted.

If these people are insolvent, why can't they just declare bankruptcy?

it's expensive and means-tested. You don't get to keep everything, even if everything doesn't amount to much.

Expensive in this case (for the US) meaning $700 to $2000. Which is rather a lot for the insolvent. Not to mention the paperwork sounds like an ordeal.

I think there is a psychological block for a lot of people too. It takes a certain point-of-view and education to be able to enter into lending arrangements with creditors with the perspective: "I believe I am going to make a profit and we will both win. But there is a chance I will not be able to. The lender is self-consciously taking a risk, which they are being compensated for via interest (same basic principle with an investor). If things go badly and I need to declare bankruptcy, then well, yes, it sucks. But I have done nothing morally wrong."

Fun fact: Henry Ford, Abraham Lincoln, and Walt Disney declared bankruptcy.

Re: The People's Bailout

#103

Post by Firehed »

patio11 wrote: post #64
malandrew wrote: post #62

Earlier quoted context omitted.

More interestingly, how would the 1099-C work in such a case. Wouldn't it be like matter and anti-matter colliding wiping each other out since you would simultaneously incur a tax-deductable loss and a taxable gain of equal value?

sigh No. If you buy $10k of debt for $500, the debt buying business' basis in the debt is $500. If they cancel it, they can deduct $500. If $10k of your debt is forgiven, you get 1099-C'ed for $10k in income. Net-net, this would cause $9.5k in income if you went through with it.

Still, taxes on $9500 are way lower than the $10000 you originally owed, so it sounds like a win.

Until everyone starts doing this and the whole system collapses, at least. That money isn't coming from thin air.

Re: The People's Bailout

#104

Post by logn »

philwelch wrote: post #89
RollingJubilee wrote: post #74

Earlier quoted context omitted.

Hi everyone. I want to assure you all that we are aware of the tax implications. We are working with a pro-bono tax lawyer and have called the IRS several times. The IRS informed us that we do not meet the requirements to file a 1099-c (we are not a bank, credit union, etc.) Our tax lawyer has written some technical langue for our website. The bottom line is that we will be purchasing debt of people who are most like…

If these people are insolvent, why can't they just declare bankruptcy?

Bankruptcy ruins your credit. It disqualifies you from holding certain jobs (such as in a company requiring people handling cash to be bonded), not to mention that credit checks are part of background checks these days. Some debt is difficult to discharge in bankruptcy (student loans). It can hurt chances of getting security clearance.

What the OP is offering seems to be a nice alternative.

Re: The People's Bailout

#105

Post by Moto7451 »

philwelch wrote: post #91
narcissus wrote: post #28

Earlier quoted context omitted.

"Debt isn't some random accident like getting hit by a car while crossing the street." Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt…

If you get hit by a car, by law, the driver of that car should have liability insurance which will end up paying all your medical bills.

Unless they don't (Or if you were in fact liable). Depending on the numbers you look at 1 in 7 drivers in uninsured or underinsured[1]. This is why you should have uninsured/underinsured coverage as part of your auto policy (on my policy it's $12 per year for $50,000 of coverage).

[1] http://usatoday30.usatoday.com/news/nation/story/2011-09-11/...

Re: The People's Bailout

#106

Post by nemo1618 »

esrauch wrote: post #75
marknutter wrote: post #63

Earlier quoted context omitted.

This may sound harsh, but medical attention isn't free, and crossing that street without medical insurance and getting hit by a car and accepting expensive treatment you can't pay for is still incurring debt which you are obligated to pay back. This is why insurance of all forms exists; to protect us from expensive, catastrophic events. So as far as fault goes, you are very much to blame if you take risks and choose…

It is totally false to assume that anyone with debt from medical bills must be uninsured. I had an appendectomy when I was in college and I had insurance and I still received a bill for something like $8000 after the insurance paid out. I managed to have half of that removed due to my very low income, and I luckily was able to pay the rest of it, but this was literally the simplest possible ER visit and surgery you c…

Seems like that's a result of jacked-up medical fees, not insufficient insurance.

Re: The People's Bailout

#107

Post by [deleted] »

RollingJubilee wrote: post #74
patio11 wrote: post #25

For the benefit of folks who might not understand how debt collection works, which may include OWS: if you buy $10,000 of an individual's debt for $500 and then forgive the debt, they have just incurred income of $10,000 and are obligated to pay taxes on it exactly as if you had handed them $10,000 in cash for services rendered. If you don't inform the IRS that you forgave the debt, via a 1099-C, you're going to get…

Hi everyone. I want to assure you all that we are aware of the tax implications. We are working with a pro-bono tax lawyer and have called the IRS several times. The IRS informed us that we do not meet the requirements to file a 1099-c (we are not a bank, credit union, etc.) Our tax lawyer has written some technical langue for our website. The bottom line is that we will be purchasing debt of people who are most like…

[deleted]

Re: The People's Bailout

#108

Post by lifeformed »

logn wrote: post #104
philwelch wrote: post #89

Earlier quoted context omitted.

If these people are insolvent, why can't they just declare bankruptcy?

Bankruptcy ruins your credit. It disqualifies you from holding certain jobs (such as in a company requiring people handling cash to be bonded), not to mention that credit checks are part of background checks these days. Some debt is difficult to discharge in bankruptcy (student loans). It can hurt chances of getting security clearance. What the OP is offering seems to be a nice alternative.

Isn't this also bad for your credit? Well, I guess maybe it's just less bad than bankruptcy or not paying anything at all.

Re: The People's Bailout

#109

Post by lizzard »

marknutter wrote: post #19

How does OWS think this debt accumulated? Debt isn't some random accident like getting hit by a car while crossing the street. You have to get yourself into debt. It used to be taboo, but it's acceptable to get into debt these days and worse yet, walk away from it. OWS, to me, represents an entitled generation.

It is also accumulated by being bled dry and having paid the original debt many times over.

Re: The People's Bailout

#110

Post by intended »

patio11 wrote: post #58
namank wrote: post #54

Earlier quoted context omitted.

Much appreciated! Now I'm wondering what kind of business model Agency Y and Z operate on

A variation of "Buy debt at 25 cents on the dollar, collect 40 cents on the dollar in interest and fees, spend 8 cents on the dollar for high school graduates to man the phones and 5 cents on the dollar for overhead.", with numbers adjusted depending on how toxic their average pool of receivables is.

If I recall correctly, during the robo signing debacle - some banks ended up losing control/chain of ownership on those mortgages.

So in that subset of cases no one even legally owns the debt, (but the banks still tried to assert control. IIRC the judicial system didn't take too kindly to their assertion)

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