Speaker 1: Attention celebrity listeners, I hope pick out your attention. Hey everyone,
Speaker 1: this is Chuck And as some of you have heard,
Speaker 1: I have announced that I have a new solo podcast
Speaker 1: coming out in November called Movie Crush. UH. The show
Speaker 1: where I interview your favorite people about their favorite movie.
Speaker 1: And that's along and short of it's really cool. I've
Speaker 1: had a bunch of guests in the studio uh and
Speaker 1: just had a nice chat about movie fandom in general
Speaker 1: and what their favorite movie is and why. And I
Speaker 1: need more guests. So if you are a stealthy celebrity listener,
Speaker 1: if you're an actor, or a writer or a producer,
Speaker 1: uh director, if you're a musician, if you are a
Speaker 1: book author. I've had all kinds of people in the studio,
Speaker 1: and that's kind of the point, is to hear from
Speaker 1: from neat folks of all walks of life. If you
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Speaker 1: I would love, love, love to have you. Um. If
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Speaker 1: movie project, that's great. If not, we had partner studios
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Speaker 1: Crush guest, and I'll know it's you and I appreciate it.
Speaker 1: It's a lot of fun, trust me and um, here's
Speaker 1: two recording podcast together. Thanks. Welcome to Stuff you Should
Speaker 1: Know from house stuff Works dot com. Hey, and welcome
Speaker 1: to the podcast. I'm Josh Clark, and there's Charles W. Bryant.
Speaker 1: There's Jerry over there, and this is stuff you should know.
Speaker 1: Come on aboard the Rolling Jubilee guests, not to be
Speaker 1: confused with the Jamboree, which is what the boy Scouts do. Yeah,
Speaker 1: Rolling Jubilee sounds hope one, and for a lot of
Speaker 1: people it is. Yeah, unless you're like a Wall Street
Speaker 1: shark who hates seeing lower income people get out from
Speaker 1: under debt miraculously. It's a great time for everybody. I
Speaker 1: honestly didn't know much about this thing, so I didn't either. Yeah,
Speaker 1: I actually I saw I Um, I saw it in
Speaker 1: the sidebar while I was looking for an article to do. Um,
Speaker 1: and I was like, I have no idea what that is,
Speaker 1: So let me check it out, and it was just
Speaker 1: one of those hidden gems, if you will. Should we
Speaker 1: talk Let's talk about debt, baby, Yeah, And I want
Speaker 1: to say, like this is largely about the rolling jubilee,
Speaker 1: but we're gonna scratch the surface of the consumer debt
Speaker 1: secondary market. I would love to do one on just
Speaker 1: debt and debt collection and just this this the the
Speaker 1: whole industry and the I guess, the whole massive ball
Speaker 1: of wax on the business of debt. Yeah, and like
Speaker 1: you know, how in what case is it's actually good
Speaker 1: to have? And like how it kind of powers the
Speaker 1: economy all that stuff. Did we ever do one on bankruptcy? No?
Speaker 1: All right, well we should put one of those in
Speaker 1: there too. Yeah. We got a lot to do, lest
Speaker 1: we have a lot left to do, more work to
Speaker 1: be done, all right, So let's in this case we're
Speaker 1: talking about consumer debt. AH in the United States, it
Speaker 1: is a um an astounding number and problem. Is that
Speaker 1: fair to say? I would say that's yes, I think
Speaker 1: that might even be an understatement. Although so as of
Speaker 1: this when this article was written, which appears to be
Speaker 1: about December of two thousand twelve, it was a bigger
Speaker 1: problem than that. It is now from what I'm seeing. Uh,
Speaker 1: well I have an higher number now than then. Okay,
Speaker 1: go ahead. Well the number I see, well, the original
Speaker 1: number from two thousand twelve was eleven point four four
Speaker 1: trillion trill trillion. Number I got today was twelve point
Speaker 1: seven three trillion. I saw twelve point two nine trillion,
Speaker 1: which is still I mean, that's years. Is almost a
Speaker 1: trillion dollars more in four years. I'm sure those are.
Speaker 1: So that's two thousands seventeen numbers. Yeah, okay, well that
Speaker 1: would explain. Mine was Q two of two thousand sixteen.
Speaker 1: So it's the distant past, a trillion dollar increase in
Speaker 1: five years. That's all of the household debt, credit cards, mortgages,
Speaker 1: UM car loans, uh old, medical bills, all that student
Speaker 1: loans a big part of it. Yeah, that's a big
Speaker 1: one too, that all households have in the United States. Right. Yes,
Speaker 1: as of two thousand fifteen, I'm hats off to you, man,
Speaker 1: I could not find two thousand seventeen numbers. Yeah. So
Speaker 1: here's the thing, debt. If you talk to someone who
Speaker 1: knows finance, they will say, like, that is not the
Speaker 1: worst thing in the world. It's not like being in debt.
Speaker 1: It's got to be the right kind of debt, Like
Speaker 1: owing a ton of money to high interest credit cards
Speaker 1: is not good by any measure. Um, Emily and I
Speaker 1: got smart when we Uh, I think I've told the
Speaker 1: story when we bought our house, we had a bunch
Speaker 1: of stupid credit card debt and this was she's twelve
Speaker 1: or so years ago. And what we did, because they
Speaker 1: were given away money back then foolishly uh. And this
Speaker 1: could have bought us in the butt, I guess if
Speaker 1: we hadn't have, you know, gotten jobs and been able
Speaker 1: to afford payments. But we rolled all that credit card
Speaker 1: debt into our homeland. So we literally paid off every
Speaker 1: cent of it and told each other We're never gonna
Speaker 1: go into credit card debt again. And since that day,
Speaker 1: and it was tough, we have never not paid off
Speaker 1: a credit card in full at the end of every month. Yeah.
Speaker 1: We we um almost always pay them off too. And
Speaker 1: it's like just just the best feeling to be able
Speaker 1: to look at that stuff and be like, oh, wow,
Speaker 1: I'm not like dying here. Well yeah, And to be
Speaker 1: able to kind of give the finger to a credit
Speaker 1: card company and say I'm using you for what you're
Speaker 1: supposed to be used for, which is to pay for
Speaker 1: things easier, but to not mortgage my life away with
Speaker 1: ridiculous interest rates because I'm buying stuff I don't need
Speaker 1: and can't pay for. And thanks, thanks for the sky
Speaker 1: miles chumps. Yeah for real. All right, So that's bad debt.
Speaker 1: They're all kinds of bad debt. But you know that's
Speaker 1: not the worst thing in the world to have. What's
Speaker 1: bad is delinquent to debt, right and yeah, so there is,
Speaker 1: like you were saying, I think good debt to have
Speaker 1: if you live in a consumer based economy, right, that
Speaker 1: kind of makes makes the world go round. But yes,
Speaker 1: delinquent debt is is across the board bad debt for
Speaker 1: almost everybody involved. Yeah, and about ten of the debt
Speaker 1: in the US is delinquent debt. See, this is where
Speaker 1: I saw a major drop. Actually, okay, so is it
Speaker 1: not that high anymore? No? Man like by half? Wow? Yeah,
Speaker 1: as again I found Q two of two thousand and sixteen,
Speaker 1: but it was in this article that was written in
Speaker 1: two thousand twelves. Is one point oh six trillion is delinquent?
Speaker 1: I saw in two thousand and sixteen. It was five
Speaker 1: and eighty nine billion. Oh well, that's in the right direction.
Speaker 1: And then about three quarters of that was um, super delinquent,
Speaker 1: although I think they call it seriously delinquent, I like
Speaker 1: super delinquent more or way delinquent or oh my god,
Speaker 1: which means three months ninety days late or more. Probably
Speaker 1: not in all cases, but probably delinquent to the point
Speaker 1: where you're you're not going to pay it, right. But
Speaker 1: but so there are in there the banks, as anyone
Speaker 1: who's ever owed a bill longer than ninety days knows,
Speaker 1: banks and lenders of any sort will just be like here, here, here,
Speaker 1: collection agency, go take this and if you can get
Speaker 1: something out of them, will split what you get right um,
Speaker 1: And you're you're in the cycle because collection agencies that's
Speaker 1: their business, right, lenders lend of money. Collection agencies try
Speaker 1: to go get money that's owed right there like a
Speaker 1: different ilk altogether. And there's actually different kinds of levels
Speaker 1: of that, as we'll see. But you're you're in the machine,
Speaker 1: and your life is going to be made unpleasant by
Speaker 1: the people who are trying to collect on those bills. Right.
Speaker 1: What the rolling jubilie, which we're talking about today, What
Speaker 1: that does is they have entered the debt collection industry,
Speaker 1: but rather than trying to collect on debt, they are
Speaker 1: buying debt and forgiving it. Yeah, so here's what can happen.
Speaker 1: Back up a second. Let's say you owe a ton
Speaker 1: of money on a bad credit card and you have
Speaker 1: been delinquent for a little while, and you call up
Speaker 1: that credit card company and you say, you know what,
Speaker 1: I want to pay this I spent this money, but
Speaker 1: your interest rate is really bad, and can you work
Speaker 1: with me on this interest rate and get it down
Speaker 1: to a point. And they'll stop you right there and say, oh,
Speaker 1: sir or ma'am, I'm sorry, but we don't own your
Speaker 1: debt anymore. And you go huh. And you say no, no,
Speaker 1: no, no no, no. We sold that debt to an investor
Speaker 1: and you go huh. And if you don't know that
Speaker 1: this is how this works, then well you didn't pay
Speaker 1: attention during the mortgage crisis, because that's basically what that was,
Speaker 1: bundling debt to an investor, bundling loans, um mortgages, bad
Speaker 1: debt into securities that are then sold to those investors
Speaker 1: who buy it really really cheap, with the idea that
Speaker 1: they can then go out and collect on a portion
Speaker 1: of that to make a big profit. And we'll like,
Speaker 1: we'll get into the details a little a little more
Speaker 1: in a minute, but the Jubilee itself the idea of
Speaker 1: buying debt, entering that industry and buying debt, but rather
Speaker 1: than trying to make a profit like you were saying,
Speaker 1: but just to forgive that debt so that the people
Speaker 1: who owe the money don't have that burden any longer. UM.
Speaker 1: That is the whole point behind it. And if you're like,
Speaker 1: wait a minute, wait a minute, this sounds like some
Speaker 1: sort of plot out of maybe Occupy Wall Street, well
Speaker 1: then you would be correct, because at Zukkati Park and
Speaker 1: I think two thousand and eleven, the idea for doing
Speaker 1: this was bandied about and there was a guy named
Speaker 1: Thomas Gorker who was there at one of these conversations,
Speaker 1: and he went on to found this thing called Strike Debt,
Speaker 1: which is an offshoot organization from Occupy Wall Street and
Speaker 1: Strike that has this project called Rolling Jubilee. UM. So
Speaker 1: it's a direct outcropping of Occupy Wall Street. Yeah, this
Speaker 1: is when UM Strike Debt was finally launched and the
Speaker 1: whole deal with Occupy Wall Street was basically protesters getting
Speaker 1: together and saying, well, you'll bail out banks to the
Speaker 1: tune of billions and trillions of dollars. But the banks
Speaker 1: don't then turn and turn say well, we're gonna forgive
Speaker 1: consumer debt as well, since we were bailed out. They'll
Speaker 1: bail out the big banks, but the consumer is still
Speaker 1: uh in big trouble. And so the idea of of
Speaker 1: the Rolling Jubilee and Project Strike debt was a bailout
Speaker 1: of by Yeah, and there was there's one facet to that,
Speaker 1: um lopsided bailout situation to that I think you left out,
Speaker 1: which is the banks are getting the bailouts from the government,
Speaker 1: but the government's getting that money from the taxpayers, and
Speaker 1: very frequently those taxpayers who actually gave the money to
Speaker 1: bail out the banks are the same ones that the
Speaker 1: banks are turning the thumbscrews on. So they're basically saying,
Speaker 1: thanks for the bailout money, give us the money you
Speaker 1: actually owe us individually now. And Yeah, Occupy had a
Speaker 1: big problem with that, and I think for good reason. Frankly,
Speaker 1: if I can go on record for saying that, yeah,
Speaker 1: so um, I agree the Rolling Jubilee as far as
Speaker 1: structure goes, Uh, they have and we're not gonna get
Speaker 1: too much in the weeds on this, but they have
Speaker 1: a board of directors and then volunteers who are not
Speaker 1: paid assent. Originally they had um brokers in while they're
Speaker 1: still brokers and web developers who have been paid but
Speaker 1: well well below market value. They're not completely donating their
Speaker 1: time in all cases, but they're getting paid apendance for
Speaker 1: this cause of what they normally would right like um
Speaker 1: pre wrapped cooler sandwiches money, you know what I mean,
Speaker 1: Like the kind not even like like a recognizable brand
Speaker 1: of sandwich that you buy in like a Bow Dagger
Speaker 1: convenience story, just you know, somebody's last name with like
Speaker 1: a poorly drawn like logo next to it that's overprinted
Speaker 1: so it's mudgy. You can't even really see what the
Speaker 1: logo is supposed to be. That is the kind of
Speaker 1: sandwiches these people are able to buy with the money
Speaker 1: they're getting from the Rolling Jubilee. Yeah, where there is
Speaker 1: no discernible difference between the meat and the bread. They've
Speaker 1: just coalesced into one lumpy, moist unit. I know it
Speaker 1: grows so many people out there with that word combination
Speaker 1: moist Yeah, moist unit, moist lumpy units. That what I said, Um,
Speaker 1: should we take a break so soon after moist lumpy unit. Yeah,
Speaker 1: all right, let's do that, and we'll come back and
Speaker 1: talk a little bit about the origins of the word jubilie.
Speaker 1: All right, josh Uh, I kind of thought jubilie meant
Speaker 1: jamboree because I'm a big dumb dump sometimes. Hey, I'm
Speaker 1: right there with you. But it's not true. It actually
Speaker 1: comes from the Bible, specifically the Book of Leviticus. Um.
Speaker 1: I'm not sure which one I used to know all
Speaker 1: those in order I could rattle them off. Genesis, a
Speaker 1: third book of the Bible, I think, right, I know Genesis, Exodus, Leviticus, Germedy,
Speaker 1: Joshua Judges Ruth first and seconds, Samuel Man the Book
Speaker 1: of Ruth. Yeah, some of that stuff really just comes
Speaker 1: right back into my my p brain. I didn't know that.
Speaker 1: So anyway, in Lebticus and the Old Testament, um, jubilee
Speaker 1: is actually an English variation of the Hebrew word joe
Speaker 1: bell jo j o b e l, which means ram's horn.
Speaker 1: And this is how you would you would blow in
Speaker 1: this horna and announce the signal of the year of
Speaker 1: the jubilee, right, which came I saw every forty nine years.
Speaker 1: Apparently this article says every fifty years, roughly every half
Speaker 1: of a century, let's just say, right. And so they
Speaker 1: blow the rams horn and that was a big deal.
Speaker 1: So a acording to Leviticus levig Kiss twenty five, I
Speaker 1: guess which is uh some section the section or verse
Speaker 1: or what chapter? Chapter A chapter? Okay, chapter verse okay?
Speaker 1: So um. The chapter of Leviticus basically says, um, here's
Speaker 1: how you do uh jubilee and everyone who is a
Speaker 1: member of the House of Israel, all the Israelites, right, um,
Speaker 1: are to have their debts forgiven. So if you are
Speaker 1: an indentured servant, you were freed. Or if you said,
Speaker 1: I'm a farmer, but I can't pay this debt, um,
Speaker 1: I really I lost all my all my um. I
Speaker 1: lost the farm on a bunch of magic beans. Because
Speaker 1: this is you know them. For the common era, people
Speaker 1: thought magic beans were a real thing. You would give
Speaker 1: that person who who sold you the magic beans your
Speaker 1: farm um as as collateral basically, and you would lose farm.
Speaker 1: But during Jubilee year you could get that farm back.
Speaker 1: You were given that farm back, restored your land, like
Speaker 1: all debts were forgiven. Yeah, it's basically God saying I'm
Speaker 1: a liberal hippie. Every fifty years, we're gonna wipe the
Speaker 1: slate clean. Here's what we don't know for sure is
Speaker 1: if this really happened, right, you can tell like the
Speaker 1: Israelites were like, oh yeah, good idea. Yeah wait, that's
Speaker 1: a great one. Nice idea, God, and then just we're
Speaker 1: just kind of didn't bring it up again. Yeah, do
Speaker 1: you think you noticed? Right? Uh? So we're not sure
Speaker 1: if that actually happened, but there are records in history
Speaker 1: of other cultures that did this sort of clean slate tradition,
Speaker 1: uh that have records under Hammerabi and Babylonia, uh in
Speaker 1: Egypt under Ptolemy, and even the Rosetta Stone has a
Speaker 1: jubilee proclamation recorded from right, So it did happen. Which
Speaker 1: think about this, Chuck, that is really heartening that like
Speaker 1: pretty early on, I guess in the agrarian system, once
Speaker 1: people settle down and all of a sudden you had
Speaker 1: like surpluses and income inequality and economic strata. Um, you
Speaker 1: you also had the idea that debts should be forgiven
Speaker 1: to Like it was a natural outcropping of that because
Speaker 1: they're they're that thing would that wouldn't exist prior to
Speaker 1: those things, because if you're a hunter gatherer, you can't
Speaker 1: go into debt. It's not possible. You're responsible for your
Speaker 1: own you know, food gathering and all that. So the
Speaker 1: idea that it just kind of naturally emerged out of it,
Speaker 1: I find that heartening. It makes me. It gives me
Speaker 1: faith in humanity again, or at least humanity from hundreds
Speaker 1: and thousands of years ago. Right. Uh So the idea
Speaker 1: with those jubilees, it was, like we said, once every
Speaker 1: forty fifty years, the idea of a rolling jubilee. The
Speaker 1: word rolling just means it's an ongoing thing. Uh, and
Speaker 1: so therefore they named it rolling Jubilee, which just to
Speaker 1: me still sounds like a party on a on a
Speaker 1: farm with people selling uh whippets out of plastic bags
Speaker 1: on exta. See, hence the rolling part. That's right. So um,
Speaker 1: this is how it works. Right, You've got the rolling
Speaker 1: Jubilee started. I think they started with a benefit concert
Speaker 1: and they managed to raise like five grand like pretty
Speaker 1: pretty quickly. Back in two thousand twelve. And what they
Speaker 1: did was they looked around and they identified like how
Speaker 1: this was happening. They knew that there were people who
Speaker 1: were in debt, and that the people that they owed
Speaker 1: the money to weren't even collecting any longer, that there
Speaker 1: was that what had developed was a secondary consumer debt market. Right,
Speaker 1: And you kind of went over a little. But I
Speaker 1: think it bears like like fleshing out. Yeah. I mean
Speaker 1: it's a little hard to wrap your head around if
Speaker 1: you're not in this world. No, but I don't mean
Speaker 1: if you live on a different planet. But in the
Speaker 1: world of finance, if you're rolling on a farm, you
Speaker 1: you may have time wrapping your head around this. But
Speaker 1: but the the basis of it is this, Right, So
Speaker 1: you go to a lender and you say, UM, lend
Speaker 1: me some money. And if you fall behind on your payments, um,
Speaker 1: after a certain amount of time, I think you would
Speaker 1: you say three months. Well, it kind of varies, but
Speaker 1: sure it could be you're in you have reached this level,
Speaker 1: like a new level of delinquency, and banks say that's it,
Speaker 1: You're done. We're we're not collecting from you anymore. You're
Speaker 1: a loss and we're writing you off. And they do
Speaker 1: this actually because back in the nineteen eighties up to
Speaker 1: the savings and loan crisis, which were you know, the
Speaker 1: savings and loan banks were the place you went to
Speaker 1: go get a mortgage in America, and because they were
Speaker 1: overregulated from the interest rates they could charge, the banks
Speaker 1: started engaging in like risky investment behavior because in that
Speaker 1: sense they were underregulated and they lost a bunch of money. Well,
Speaker 1: one of the outcroppings of the savings and loan crisis
Speaker 1: was that there were some really really shady accounting going on,
Speaker 1: and it was actually one of the first one of
Speaker 1: the early bailouts. It was like a hundred billion dollar bailout,
Speaker 1: which was an astounding amount of money. You chump changed today,
Speaker 1: sure it is, but at the time that was a
Speaker 1: huge deal. So it's a taxpayer bailout of these banks
Speaker 1: that had engaged in risky behavior and stopped me if
Speaker 1: this is starting to sound familiar, but it was largely
Speaker 1: because there was they were able to get away with it.
Speaker 1: And the problem gets to be so big because the
Speaker 1: accountants were keeping these bad assets on the books. So
Speaker 1: debt to you is an asset to the bank. It's
Speaker 1: something that they've got, they've got money they can collect
Speaker 1: on from you, right, But these delinquent assets that they
Speaker 1: had um were being kept on the books to make
Speaker 1: it look like there was a lot that the banks
Speaker 1: were a lot more flushed than they were. So after
Speaker 1: the savings a loan crisis, the government stepped in and said,
Speaker 1: you guys can't do that anymore. If you have a
Speaker 1: delinquent account on your books after say ninety days, you
Speaker 1: have to write it off. But whoa wa, Well, you're
Speaker 1: the banks and we love you and we want you
Speaker 1: to be happy and prosperous at all times, so we're
Speaker 1: gonna give you a tax deduction for that too. And
Speaker 1: they say, well, okay, what do we have to do
Speaker 1: after we write it off? And the government says, do
Speaker 1: whatever you want, sell it. We don't care, but you
Speaker 1: have to write it off and you can take a
Speaker 1: tax deduction. And then yeah, if you want to sell it,
Speaker 1: do And that's where the secondary consumer debt market was born. Yeah.
Speaker 1: And if you think that sounds like a pretty sweetheart deal,
Speaker 1: it gets even better because sometimes when they bundle this
Speaker 1: debt together and sell it to people who think they
Speaker 1: can go out, earth firms usually who can go out
Speaker 1: and make money by just recovering, like we said, just
Speaker 1: a portion of the stuff of these debts. Uh. They
Speaker 1: will then do the loan deal with that firm as
Speaker 1: well and make an additional amount of money as a lender. Yeah,
Speaker 1: they financed the purchase of that debt that they're selling
Speaker 1: to the person. It's crazy, man, So weird how things
Speaker 1: work in this country. And the weird is one way
Speaker 1: to put it, for sure. And the um the you
Speaker 1: said it, you said that they bundle this stuff right
Speaker 1: like they did with mortgage backed securities. They bundled mortgages
Speaker 1: together and then sliced them up and sold like basically
Speaker 1: them as shares. Right, this is a little different, but
Speaker 1: there's also bundling going on. But rather than just sell
Speaker 1: each debt individually, the banks will take, say, you know,
Speaker 1: all of the ones that they they're doing that day
Speaker 1: or that week or that month or whatever that they've
Speaker 1: written off, and they'll bundle it together into what's called
Speaker 1: a portfolio, and then they'll sell that portfolio for pennies
Speaker 1: on the dollar. Yeah, we're talking like it can be.
Speaker 1: You can you can spend like one dollar to buy
Speaker 1: thirty two up to thirty two dollars worth of debt.
Speaker 1: Let's say, yeah, I think that's about as good as
Speaker 1: you can get. That's the best I've seen. I've seen
Speaker 1: anywhere from ten cents on the dollar to yeah one
Speaker 1: a one to thirty two ratio. Yeah, which is I mean,
Speaker 1: that's a great uh. On one hand's super cheap, but
Speaker 1: it's very risky still, because what you're doing again is
Speaker 1: buying debt that you may or may not be able
Speaker 1: to collect on right exactly. And so like the whole
Speaker 1: industry is based on the idea that you'll be able
Speaker 1: to collect some of the um debts that are in
Speaker 1: this portfolio, and that you'll probably only be able to
Speaker 1: to um collect on a portion of the debts that
Speaker 1: you do collect on. So some out of the gate,
Speaker 1: the people just aren't gonna pay you, no matter how
Speaker 1: much you call them and harass them. They're just not
Speaker 1: gonna pay that debt. And if it's small enough that
Speaker 1: it doesn't make any sense to spend the money taking
Speaker 1: them to court, there's just nothing you can do about that.
Speaker 1: If they're like, I'm on year six of this, this
Speaker 1: debt being reported on my credit, I'm not about to
Speaker 1: pay now. Because once they make it a year seven,
Speaker 1: you guys can't do anything about it any longer except
Speaker 1: they call me. They're not gonna pay um, But there's
Speaker 1: gonna be some in that portfolio where either the people
Speaker 1: just want to pay to get you to stop calling it.
Speaker 1: The debt is big enough that you could conceivably take
Speaker 1: them to court or for other reasons. So there's gonna
Speaker 1: be some in there that you can collect on. And
Speaker 1: then when you do collect on those, you're gonna collect
Speaker 1: less usually than the full face value of the debt. Right, Yeah,
Speaker 1: they'll offer a deal. Let's say, like, hey, you're behind
Speaker 1: on your debt, and what they're what they're usually doing
Speaker 1: is trying to target people who, um, we're maybe in
Speaker 1: financial trouble and are now pulling themselves out of financial trouble,
Speaker 1: rather than going after the debt that they, like you said,
Speaker 1: just probably you have no shot at getting. But now
Speaker 1: hey you've got a job again. You're making a little dough.
Speaker 1: Um pay us back like fifty and we'll call it square.
Speaker 1: And the people think, uh, well, you know that sounds
Speaker 1: like a good deal to me. Um, I'll just go
Speaker 1: ahead and take that fifty percent deal, right, exactly. Sometimes
Speaker 1: they apparently people are are like, wow, that was a
Speaker 1: really generous thing you're doing here by offering me to
Speaker 1: just to to absolve my debt for just half of it,
Speaker 1: you know. But again, those people may have paid three
Speaker 1: cents on the dollar for that debt, but you're about
Speaker 1: to give them fifty cents on the dollar. So they're
Speaker 1: making out like bandits. And again there's something slippery and
Speaker 1: eel like and clammy about the fact that you're having
Speaker 1: to deal with these people who you never even borrowed
Speaker 1: the money from. You don't know, these people from Adam,
Speaker 1: if you'll forgive the biblical thing, right um, and and
Speaker 1: now like you're you're they're inspiring the sense of like
Speaker 1: gratitude and you for just you know, charging you fort
Speaker 1: of that debt that they had nothing to do with
Speaker 1: originally they just bought on some secondary market. Yeah. And
Speaker 1: I mean, the whole thing is slippery to me because
Speaker 1: on one hand, like targeting poor people who maybe lost
Speaker 1: their job due to circumstances beyond their control, it's not
Speaker 1: going to help any It's not gonna help anyone to
Speaker 1: keep them poor. It's not gonna help the nation or
Speaker 1: the economy. But then there are also people who were
Speaker 1: very irresponsible with their money and bought too much stuff
Speaker 1: and said, you know what, I don't want to pay
Speaker 1: for this. You'll file for bankruptcy or I'll just I'll
Speaker 1: just I don't care about my credit rating any longer.
Speaker 1: I'll just go ahead and not pay it. Sure. The
Speaker 1: thing is, though, is for years and years now, the
Speaker 1: second group of people that you you pointed out have
Speaker 1: been used to excuse mistreatment of that first group. Correct,
Speaker 1: you know what I'm saying, Like there's no real separation.
Speaker 1: It's like, oh, they're both debtors, so they you know,
Speaker 1: unfortunately they all deserve it. Yeah, and here's the deal
Speaker 1: with the Rolling Jubilee. They will uh, like we said,
Speaker 1: the whole idea is they will try and purchase these
Speaker 1: debt packages just like these firms do. Um I think
Speaker 1: they give an example of on the firms, like there's
Speaker 1: one called Encore Capital Group and here's just one example.
Speaker 1: Um I think inelve they spent forty seven million dollars
Speaker 1: to buy one point one billion dollars worth of debt
Speaker 1: uh to make a lot of money on and they
Speaker 1: you know, their aim and what they did in that
Speaker 1: case was recovered about three times what they invested through
Speaker 1: these settlements with the debtors. So let's say they made
Speaker 1: you know, three point two or you know, three and
Speaker 1: half billion bucks off that forty seven million dollar investment.
Speaker 1: Oh no, they would have made like a hundred and
Speaker 1: fifty million. They just bought a billion dollars with the
Speaker 1: debt Okay, okay, yeah, but that's still I mean, that's
Speaker 1: substantial for one quarter. Yeah, for basically just saying hey,
Speaker 1: we'll take over the harassing phone calls from here everybody. Yeah,
Speaker 1: and this is you know, they basically like the banks
Speaker 1: have given up on this because they don't have they
Speaker 1: would have to spend way too much money. Two not
Speaker 1: become bankers any longer, and to become bankers slash debt
Speaker 1: collection agencies. So they've just give up on trying to
Speaker 1: collect with these other people like, no, we do this,
Speaker 1: this is what we do, so we'll take it exactly.
Speaker 1: And again they're required banks or lenders are required by
Speaker 1: law to write off delinquent accounts after certain number of days,
Speaker 1: So even if they wanted to keep collecting on it,
Speaker 1: they can't. Yeah, that's right. So with the rolling jubilee
Speaker 1: there and we'll talk about a little bit how they
Speaker 1: do this. But they buy this debt forgive it, like
Speaker 1: we said, But it's not like you can't if you're
Speaker 1: someone who is in trouble, you can't contact the Rolling
Speaker 1: Jubilee and say, please buy my debt because it's all
Speaker 1: lumped together. Um. They do help people and families, but
Speaker 1: a lot of times they don't even know who these
Speaker 1: people are. Sometimes they do, and if they have their
Speaker 1: personal information, they will then contact them and say You're
Speaker 1: debt is forgiven. Um, but because it's a Rolling Jubilee,
Speaker 1: what we would like you to do now is is
Speaker 1: donate a little bit of money back to the cause
Speaker 1: because you're debt is forgiven. And I'm not. I wonder
Speaker 1: what they're numbers are for stuff like that. Extraordinarily low
Speaker 1: for people donating then afterward. Yeah, so so not only
Speaker 1: donating but like getting back in touch. Apparently, UM, I
Speaker 1: read this interview with Thomas Gorky and they asked him
Speaker 1: that very question, like you know, like how what kind
Speaker 1: of response are you getting from people? And and so
Speaker 1: they've got everybody's personal information, Um, they just don't have
Speaker 1: it until they buy the portfolio, right, so they'll send
Speaker 1: everyone in that portfolio a letter saying here's the amount
Speaker 1: of debt that you no longer Oh we bought your
Speaker 1: dead it's it's being abolished. And I think most people
Speaker 1: are like, is this a scam? Are are you like
Speaker 1: trying to get my Social Security numbers? And like that?
Speaker 1: So they're just totally ignoring this letter and they say, no,
Speaker 1: we're the rolling you believe do No, it doesn't because
Speaker 1: they're like like the boy Scouts. But the but regardless
Speaker 1: of whether those people get back in touch what, regardless
Speaker 1: of whether they donate to the cause or not, they're
Speaker 1: dead is still forgiven because the rolling you are strike
Speaker 1: debt makes this point that this is not like they're
Speaker 1: they're not. Their goal isn't to decide, well, who who
Speaker 1: really do who who deserves this? They can't make that
Speaker 1: judgment because when they buy a portfolio, they have no
Speaker 1: idea who the individuals are in there. They just know
Speaker 1: that these people um owe money, and that the likelihood,
Speaker 1: since they're delinquent on their debt, that they either are
Speaker 1: experiencing a time when they're down in their luck or
Speaker 1: are getting out of a time when they're down in
Speaker 1: their luck. That is enough that's that's good enough for
Speaker 1: for Strike Debt to to justify buying their debt and
Speaker 1: abolishing it. Well yeah, and not only that, but rolling
Speaker 1: Jubilee and Strike Debt's goal isn't. They're not saying we're
Speaker 1: gonna solve the consumer debt crisis, or even we're gonna
Speaker 1: solve when we'll talk about student loans more in a minute,
Speaker 1: but we're gonna solve the student loan problem. They're literally
Speaker 1: just saying we're gonna solve a tiny fraction of this.
Speaker 1: But what our real aim is is to raise awareness
Speaker 1: because you just you can protest all you want, but
Speaker 1: you simply can't ignore a real program like this right
Speaker 1: exactly because it gets a lot of pressed too. You know. Sure,
Speaker 1: So let's take one more break, Chuck, and then we'll
Speaker 1: come back with more on this. Okay, we're back, We're back.
Speaker 1: So um. Apparently, Chuck. Initially, they were really worried about
Speaker 1: how they were going to be able to kind of
Speaker 1: come into this industry because it was a pretty tight
Speaker 1: knit industry. Yeah, like when a bank goes to sell debt,
Speaker 1: it's not like they place a want ad and say, well,
Speaker 1: who's out. They're like, they know who's out there. They
Speaker 1: know who these firms are, and they have trusted which
Speaker 1: is kind of a funny way to say it, working
Speaker 1: relationships with these firms. Right, So they were thinking like, well,
Speaker 1: we need to have people on the inside buying debt force.
Speaker 1: It's the only way they're going to ever let us
Speaker 1: do this. We have to we have to sneak around
Speaker 1: and do it. The way this article puts it is, um,
Speaker 1: they had sheep and wolves clothing, yes, buying debt for
Speaker 1: them on behalf of this rolling jubilie. Right. So this again,
Speaker 1: this article is written in two thousand twelve. Apparently that
Speaker 1: did not pan out at all. So as they got
Speaker 1: more into it, they almost became amazed at the willingness
Speaker 1: of this uh secondary debt industry too to sell to
Speaker 1: them knowing that they were going to abolish it or
Speaker 1: not caring to find out whether they were abolishing or
Speaker 1: who they were what they were doing, which means that, yeah,
Speaker 1: this industry is so inscrupulous it doesn't even look out
Speaker 1: for itself. Yeah, you know, so they they um, I
Speaker 1: think as they got further into it too, and this
Speaker 1: may have actually developed since two thousand twelve as well.
Speaker 1: This is Um, this industry is is spread even more.
Speaker 1: I think it's a little less tight knit than it
Speaker 1: once was. There's a lot of brokers that are set
Speaker 1: up where they're the ones that are dealing with the
Speaker 1: banks and then turning around and selling it on behalf
Speaker 1: of the banks and then taking a little cut of
Speaker 1: whatever the portfolio goes for. Right. But then there's also
Speaker 1: like websites that do the same thing. Just like you
Speaker 1: have an online stock broker, there are websites where you
Speaker 1: or I Chuck can put together a thousand dollars and
Speaker 1: go buy a portfolio that was worth like ten to
Speaker 1: thirty thousand dollars um. So if you want to really
Speaker 1: stick it to your fellow man, um, go do that.
Speaker 1: Go start doing that because it's something you can do online.
Speaker 1: Now that is correct, alright, So will the work is
Speaker 1: the big question? Uh. It certainly will work with awareness.
Speaker 1: But as far as we're all numbers go, as of today, um,
Speaker 1: which is what October was it? Fourth fifth fourth October
Speaker 1: four seventeen, they have raised uh seven hundred, one thousand,
Speaker 1: three hundred seventeen dollars, which this is a few hours ago,
Speaker 1: so it's more than that probably by now and they
Speaker 1: have forgiven about thirty two million dollars total to date, which,
Speaker 1: like we said, is a not even a fraction what's
Speaker 1: below a fraction of infantismal amount? An infantismal amount. Did
Speaker 1: I say infantismizable? I think it just made up a word,
Speaker 1: but it kind of works. It's so infantismal it's invisible,
Speaker 1: that's right. Uh, it's such a small amount that it
Speaker 1: makes no dint in the problem really, except to those
Speaker 1: individuals and families who are like, well this really worked
Speaker 1: out for me. But U thirty two million bucks is
Speaker 1: raising awareness, which is a good thing. Yeah, oh yeah, yeah. Again,
Speaker 1: Like there was a huge thing in two thousand twelve
Speaker 1: when they first announced it. It was everywhere, right, everybody
Speaker 1: was talking about it. Uh. They got another bump in
Speaker 1: two thousand fourteen. I can't remember what happened, um, but
Speaker 1: then I think either this year or last year, they
Speaker 1: made the rounds with media again by buying debt from
Speaker 1: UM something called Corinthian Colleges, which is a for profit
Speaker 1: college UM like company corporation. Yeah that and Thomas Gorky
Speaker 1: called them. He said that they were quote the worst
Speaker 1: of the worst, and they have just tons of lawsuits
Speaker 1: against them, um for UM just all manner of activities. Uh.
Speaker 1: And the Rolling JUBILEEUE got something like like three and
Speaker 1: a half million dollars worth of debt from them, and
Speaker 1: this would be student loan debt, yes, um. And the
Speaker 1: reason that they were able to do student loan days
Speaker 1: because these this is a for profit college. So this
Speaker 1: would have been federal student debt, yeah, like of student
Speaker 1: loans or from the federal government. And they, uh, the
Speaker 1: federal government does not sell their debt. No, so if
Speaker 1: you have a student loan, you're through the federal government,
Speaker 1: like the Rolling Jubilee is never going to be able
Speaker 1: to help you, at least not directly like that. But
Speaker 1: that also raises one of the like long standing criticisms
Speaker 1: against this idea. If you are against the entire like
Speaker 1: predatory lending idea of UM, the banking industry and the
Speaker 1: secondary market, that the whole thing, this whole ikey mess, Right,
Speaker 1: you're gonna criticize UM. Strike debt for contributing to it.
Speaker 1: They're they're throwing money into it, even though they're even
Speaker 1: though they're like abolishing debt, they're still giving money for it. Right,
Speaker 1: And so strike this whole thing is like, hey man,
Speaker 1: the level that we're operating on is so small that
Speaker 1: we couldn't possibly affect the market. Yeah, like in their
Speaker 1: in their wildest dreams, they could uh affect the markets
Speaker 1: such where they could drive up the price and really
Speaker 1: compete as a as a as a top dog in
Speaker 1: the industry and maybe even drive some of those other
Speaker 1: firms out of business, and like that will never ever happen. No,
Speaker 1: And they also point out that like banks have to
Speaker 1: sell this stuff anyway, or they have to get rid
Speaker 1: of it anyway. UM, by law, they have to write
Speaker 1: it off. So this this debt was going to be
Speaker 1: it was going to be sold one way or another.
Speaker 1: And they also try to buy debt at that really
Speaker 1: lucrative stage, lucrative for the debt collectors, where you you
Speaker 1: have been more than ninety days delinquent for about a year,
Speaker 1: so you probably went through that rough patch like you
Speaker 1: were talking about, Chuck, But now you the likelihood that
Speaker 1: maybe you've got a job again and you're starting to
Speaker 1: like get your debt under control and are therefore amenable
Speaker 1: to UM an offer of just paying off UM. That's
Speaker 1: the kind of debt they're trying to buy because that's
Speaker 1: the Those are the people who are most vulnerable to
Speaker 1: this kind of um this industry, right, So they're saying,
Speaker 1: all this is gonna happen anyway, and we're not affecting
Speaker 1: the the the debt that people are are paying, and
Speaker 1: we're not really helping the banking industry anymore than they
Speaker 1: would have been helped anyway. The thing that sticks to
Speaker 1: me though, is and I couldn't find this. Did you
Speaker 1: see if they bought that debt from Corinthian Colleges directly? Oh?
Speaker 1: I don't know, because if so, then they were they
Speaker 1: were paying money to Corinthian Colleges UM. And I could
Speaker 1: see that that criticism just being there because Corinthian College
Speaker 1: UM or any for profit university UH isn't required to
Speaker 1: write off bad debts, so they wouldn't be forced to
Speaker 1: do that if they bought from them. They also work
Speaker 1: with a lender. That's just a guess. I don't know. Yeah,
Speaker 1: I don't want to speak to that. Well. I saw that.
Speaker 1: I saw this one that basically was teaching individual investors
Speaker 1: how to go get into this, and one of the
Speaker 1: things they suggested was go hang out at small claims
Speaker 1: court and when you when a company comes in and
Speaker 1: they're taking some debt or to court to collect um
Speaker 1: on a debt. Just go up to them after court
Speaker 1: and be like, hey, let me handle this. Just sell
Speaker 1: me all your debts, bundle them together, and I'll buy
Speaker 1: it from you. So people do go directly to companies
Speaker 1: that have have like bad debts on their books. Um,
Speaker 1: so it's possible they did go to Corinthian College. I
Speaker 1: didn't see that one one way or the other. Very interesting.
Speaker 1: And then there was one other thing that was kind
Speaker 1: of an early concern that apparently didn't pan out, and
Speaker 1: that was that whether or not the government could consider
Speaker 1: this debt abolishment as income for the person who owed
Speaker 1: the debt and would therefore oh taxes on it. And
Speaker 1: so apparently occupied Walster your strike debt with some lawyers,
Speaker 1: and um, the lawyers said it is our professional opinion
Speaker 1: that this would not qualify as income, and so they
Speaker 1: these people should not owe any tax burden. And so far,
Speaker 1: no one's, no one's had, no one's gotten a tax
Speaker 1: bill for their tax being abolished by strike debt. It's
Speaker 1: so convoluted, it's a little complied. Do you got anything else? No,
Speaker 1: I think that's it. Man, Uh, let's see. If you
Speaker 1: want to know more about the Rolling Jubilee, good, check
Speaker 1: out this article on how stuff works. It's a good one.
Speaker 1: Grab your ban Joe yep and um, since uh, keep
Speaker 1: an ear out eventually for like just a larger debt
Speaker 1: episode because it is interesting and weird. Um and since
Speaker 1: I said weird, it's time for chuck administrative details beautiful.
Speaker 1: This is part two where we thank people for their
Speaker 1: lovely gifts and the kindnesses that they bestow upon us.
Speaker 1: All right, I'm going start with Emily Winfield. She sent
Speaker 1: a well, she sent me a reformed Bedwetters Society patch.
Speaker 1: I'm on record as a late bed wetter and I've
Speaker 1: always championed people not being ashamed of that. So apparently
Speaker 1: Emily was and they she made a patch. It's really cool.
Speaker 1: That's amazing. I gotta see that. Why I didn't see it? Uh,
Speaker 1: let's see. Jackson Harder send us a Jigsaw puzzle postcard.
Speaker 1: I appreciate that, Thanks Jackson. David Velasquez and Samantha Penna
Speaker 1: sent another wedding invite. Oh yeah, muzzle top. Nick Sokol
Speaker 1: sent us a bunch of great stuff from Korea. Thank you,
Speaker 1: very much for that. Jonathan Beale sent us handmade copper
Speaker 1: flasks from his company. Uh. Sara Toto dot com s
Speaker 1: E R t O d O stuff. You should drink
Speaker 1: copper flasks. They are to be beautiful. Terry M has
Speaker 1: a daughter named Chuck, who wrote us a very kind
Speaker 1: thank you note about the HIV episode in we want
Speaker 1: to say, Terry, we hope your friend's partner is doing well. Absolutely.
Speaker 1: Chris Wecht of Carlton Brewery in New Jersey, well, he
Speaker 1: sent us beer. Thank you. Ryan and Chloe sent us
Speaker 1: a Montreal postcard. Thank you. Caroline Cross, she was very
Speaker 1: moved by the M the MS episode because her mom
Speaker 1: had MS, so she sent some sponge candy from Buffalo,
Speaker 1: New York to make me feel better about my friend Billy. Nice.
Speaker 1: That was very sweet, it was Uh. Connor g sent
Speaker 1: us some candy, sent us some smarties and a nice letter.
Speaker 1: Thanks Connor Te. Sarah van dong or Bean Dange d
Speaker 1: O n g E send us her book I Love
Speaker 1: Love Walla Walla. It's her book about loving Walla Walla, Washington.
Speaker 1: Alexander Peppe, thanks for the thank you note, uh, and
Speaker 1: you're welcome for helping you kick your diet coke habit.
Speaker 1: That's right. Julia Decaman sent us uh, well, sent some
Speaker 1: hand painted pictures for me. It was pictures of my
Speaker 1: dear departed dogs, Buckley and Lauran. Uh. For you, she
Speaker 1: sent you one Charleston Hospitality, which was a painting of
Speaker 1: the Belmont and Queen Street grocery. And for Jerry sent
Speaker 1: her one of a pink Peoni and uh, you can
Speaker 1: go to buy b y j Deckman dot com uh
Speaker 1: to check out her work. And since then we have
Speaker 1: paid her. She's so sad. Paid her for portraits of
Speaker 1: Lauren and we're about to commission another one for the Wizard.
Speaker 1: So the core for will be represented by Julie Duckman's
Speaker 1: art in our household Caroline. And I'm not even gonna
Speaker 1: attempt your last name, Caroline. I'm just gonna spell it
Speaker 1: s w I s z c Z. That's swizzle stick.
Speaker 1: Put that together with a dot com and it will
Speaker 1: take you to her site which has They're awesome zene
Speaker 1: featuring us called the dread appropriately enough, Jordan Pearson from
Speaker 1: Canada sen as some Canadian chips lace ketchup an old
Speaker 1: Dutch ketchup chips sALS gluten is what it says because
Speaker 1: it's French Canada. Uh. And also Jordan had the nicest
Speaker 1: handwriting I think I've ever seen. Yeah, oh yeah, thanks
Speaker 1: a lot for that. Nice handwriting these days is that'll
Speaker 1: take you far in the past, um, let's see. And
Speaker 1: then Katherine from Vello Drome sent us some CDs. Thanks
Speaker 1: a lot for that. Captain Matthew Grubs and us his
Speaker 1: first children's book called Tommy P. Tinker and the super
Speaker 1: Duper Rare Bottle cap nice. And then we want to
Speaker 1: thank Max from chirps Chips who sent us some chirps chips.
Speaker 1: Remember in our our crickets episode Crickets um well eating
Speaker 1: crickets basically, um, we mentioned chirps and they heard it
Speaker 1: and they said, here, guys, try this. Did you try
Speaker 1: hi yet? I have yet to try it. I think
Speaker 1: we should try it like on Facebook Live or something
Speaker 1: like that. That's a good idea, you know. Uh ja
Speaker 1: more And that is with one oh send us his
Speaker 1: hot sauce. Spank you very much is the name of
Speaker 1: the hot sauce. I'm not just being cheeky, n And
Speaker 1: then that's that's all I've got written down. You got anymore?
Speaker 1: I just got one more Matthew for Minnesota, Sin. It's
Speaker 1: his joke book, Uh, the River of Wahaha. Great. I
Speaker 1: love a good joke book. Great. Well, thanks everybody for
Speaker 1: sending us stuff, and if you want to send us stuff,
Speaker 1: we always are grateful for it. Um You can get
Speaker 1: in touch with us via Twitter. I'm at josh um
Speaker 1: Clark and the official handle is s y s K podcast.
Speaker 1: You can join us on Facebook dot com slash stuff
Speaker 1: you Should Know or slash Charles W. Chuck Bryant. You
Speaker 1: can send us all an email to Stuff Podcast at
Speaker 1: how stuff Works dot com and has always joined us
Speaker 1: at our home on the web, Stuff you should Know
Speaker 1: dot com for more on this and thousands of other
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