How Your Medical Debt May One Day Magically Disappear

Remember those angry college kids sleeping in Zuccotti Park to protest against Wall Street? They want to own your debt.

How Your Medical Debt May One Day Magically Disappear Photo (cc) by The All-Nite Images

Remember Occupy Wall Street? When the young activists finished camping out and switching banks, some of them turned to more practical goals.

One group of them formed a financial services cooperative and plan to launch an Occupy-branded debit card. Others started wiping out people’s medical debt.

The latter operation, called the Rolling Jubilee, has been running for a year now. During that time, it has received more than $633,000 in donations — and erased a whopping $14.7 million in debt, according to the people running it.

How do they do it? They solicit donations, then use the money to get between the hospitals and the debt collectors. They buy up debts in bundles for pennies on the dollar of what’s owed, and then cancel them. They just say: You owe us nothing. Poof, debt gone.

“In the Jubilee’s latest and largest debt buyout in May, they purchased a $12 million bundle of medical debt for just under $250,000, relieving some 1900 consumers of an average of $6,400 worth of debt each,” Yahoo Finance says. The average donation fueling that purchase was $40.

You can’t ask them for help — the Rolling Jubilee can’t track down specific debts because of the way they’re bundled, Yahoo Finance says. The group learns the names included only after purchasing a bundle, and then it tries to contact those people. It chose to focus on medical debt first because that’s the largest source of U.S. personal bankruptcies. But if you have outstanding medical debt, maybe you’ll get lucky.

“It’s like winning the lottery without ever knowing you entered,” Yahoo Finance says.

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