Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The People's Bailout

howtosharpenpencils.tumblr.com

Post reply on HN
Print view View original

141–150 of 323 posts

Re: The People's Bailout

#141

Post by stickfigure »

justindocanto wrote: post #43
MattGrommes wrote: post #15

Earlier quoted context omitted.

This is "a" problem, not "the" problem. For a large number of people, getting $5k or $10k of debt erased would at the very least a large weight off their back, at the most a life changer. Living paycheck to paycheck means cherishing every extra dollar you get to keep. Getting to keep $50 or $100 a month in your pocket instead of sending off to some credit card or debt collection agency is a big deal sometimes. Most p…

But if theyre making payments on the debt, the debt collector won't sell it because theyre actually getting their money. The only debts OWS is going to be able to buy are the ones not making payments and the ones that havent made payments in a very long time. So, as cool as not having to pay 50/100 a month sounds, that wont happen to anybody because the ones paying are not the kind of people that would be getting rel…

This seems like the key insight about this issue. The debts OWS buys on the cheap are debts that were never going to be paid off in the first place. The net practical effect of this action is to transfer money from well-meaning people into the hands of debt collection agencies.

Seems like the only people being bailed out are debt speculators. Doesn't sound like a worthy cause to me.

Re: The People's Bailout

#142

Post by smsm42 »

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.

But if you're insolvent, doesn't that mean you are... well, insolvent, as in not able to return credits? That's what "credit" means, no? If some company for some reason (which evades me, but that's their choice) doesn't want to hire insolvent people, wouldn't presenting oneself as solvent be a deception?

Student loans is a good cause though, indeed it is very hard to get rid of. But since they carry government guarantees (unless it's a private ones) - why would one be willing to sell it for cents on a dollar instead of just getting the money back from the state?

Re: The People's Bailout

#143

Post by akiselev »

nemo1618 wrote: post #106
esrauch wrote: post #75

Earlier quoted context omitted.

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.

Which themselves have tied up in a price hike death spiral.

The world is complicated and now more than ever everything is interdependent.

Re: The People's Bailout

#144

Post by aidenn0 »

pmorici wrote: post #131

What are they talking about when they say, "As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!" Is that a joke or are they actually making a return on the investment?

I think the theory is that it's 30 times better than giving $500 to people who are broke.

Re: The People's Bailout

#145

Post by smsm42 »

sc68cal wrote: post #95
tsotha wrote: post #56

Earlier quoted context omitted.

>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. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.

That's why we have bankruptcy laws. Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an... It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card com…

Many jobs require a degree, but not every degree leads to a job. Unfortunately, easy access to huge loans and widespread confusion about the relationship between the degree and the paying jobs has lead to ever increasing number of people in huge debts with no way to repay it ever. It reminds me some recent history when people got into huge debt in order to get something that is sure to provide them huge value and make them rich - and then it turned out not to be so. We're heading into it again, full steam.

Re: The People's Bailout

#146

Post by aarondf »

saraid216 wrote: post #124
rprasad wrote: post #88

Earlier quoted context omitted.

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. It could alternatively be characterized as a gift, in which case it is not income to the recipient (but could incur gift taxes to the "gifter"). If you don't inform the IRS that you forgave…

But gifts are capped at $12,000 per year, which puts something of a damper on the whole point of this, unless they've figured out a legal way to farm out who gets credit. So either they've promised not to go after these cases, or ... something else?

Actually 13,000 per individual, so 26,000 to the household if married. And 52,000 if given from one couple to another (think parents to child+spouse.)

(CPA in Texas)

Re: The People's Bailout

#147

Post by malandrew »

SeoxyS wrote: post #121

Instead of operating this as a charity (doesn't scale), why not sell the debt back to the original lendees at face value. (Buy back your $15k loan for $500.) I guess that wouldn't be legal, though?

Personally I think they should try to recoup the face value from the debtor. If my debt was among the debt bought by OWS and they contacted me giving me the option to pay it off at face value so they could move forward with helping others, I'd pay it off in a second.

Re: The People's Bailout

#148

Post by philwelch »

frio wrote: post #99
philwelch wrote: post #91

Earlier quoted context omitted.

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.

So what if the shoe's on the other foot? A driver hits someone. The driver doesn't have insurance. He's now liable for the other person's medical bills, but can't afford them. He's now massively in debt over some random accident. No matter the moral judgment ("he shouldn't be driving without insurance"), the underlying point was that random debt does happen :).

Not only should he not be driving without insurance, but he's almost certainly at fault for hitting the pedestrian. We put some debtors into prison for lesser forms of irresponsibility.

Re: The People's Bailout

#149

Post by [deleted] »

lifeformed wrote: post #108
logn wrote: post #104

Earlier quoted context omitted.

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.

[deleted]

Re: The People's Bailout

#150

Post by philwelch »

lifeguard wrote: post #128
lifeformed wrote: post #108

Earlier quoted context omitted.

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.

Not only is it bad, a BK on your file means you will have to use 'special' finance to get a car loan and it will be impossible to find a bank to underwrite a sub-prime loan for a house (for seven years). You would also have to pay a higher rent security deposit on an apartment.

If you lose badly enough at credit that you end up declaring bankruptcy, maybe homeownership or car loans aren't for you. Just a thought.
Post reply on HN