Even though Occupy Wall Street hasn’t been in the news a lot lately, some of the offshoot organizations that sprang from the movement remain active. One such organization is Strike Debt, which claims to have arranged for more than 1,000 people to receive forgiveness on $1.1 million in medical debt.
According to CNN Money, Strike Debt says that it has focused on medical debt, since that is one of the main causes of bankruptcy for many consumers. In order to make this happen, Strike Debt raised money from donors, and then used the money to buy emergency room debt.
How Does Buying Debt Work?
In this case, Strike Debt bought debt stemming from emergency room visits.
In the normal course of such debt, it would be turned over to collectors, who would then try to get money from the consumer. Since the likelihood of collecting on the debt is fairly low, a collector will buy the debt for much less than it is worth at face value. The hospital/emergency room is happy to get anything for the debt, since it would have to written off otherwise. If the collection agency can get the debtor to pay, then it makes a profit.
CNN Money reports that Strike Debt spent $21,000 to pay off more than $1 million in emergency room debt. Then, instead of trying to get money from the consumers who owed, Strike Debt simply forgave the debt.
Going forward, CNN Money reports, Strike Debt hopes to continue to raise awareness about medical debt and its impact on consumers, as well as pushing to help buy and pay off other debts.
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