Tag Archives: Jessica Silver-Greenberg

Dunning Dead Debt-beats and the Occupy Anthropology of Debt

  New Orleans               The notion that there might be a “house theorist” in the tent cities of the Occupy movement was interesting in and of itself, but the fact that such soul would be David Graeber who recently wrote, Debt: The First 5000 Years, was even more interesting to me.  This whole debt thing is a giant weight in contemporary society, stretching as ACORN International recently studied into the underpinnings of the false hopes of the microcredit schemes for the poor, which were better at larding on debt than reducing poverty.

Graeber is an anthropologist and Thomas Meaney in a Times tongue-in-cheek-in-eyeball essay argues that the book essentially tracks the time line from when debts moved from moral obligations to fast buck hustles underlying everything from subprime lending to Wall Street shenanigans.  Supposedly, Graeber “imagines a world where such liabilities might be forgiven altogether.”  Speaking for many, it just can’t get her fast enough for me!  Occupy that, banker man!

Unfortunately for Graeber’s argument, it seems that the strong foundation of an atavistic moral commitment to repay debts continues to be the foundation of a multi-billion dollar collection agency enterprise subcontracting the heat and harassment from the sterling reputations of big banks and credit card companies to prey on the families and relatives of the dearly departed to try and pinch them for their last pennies to resolve debts left by the dead.  An excellent article by Jessica Silver-Greenberg in the Wall Street Journal not long ago went into chilly detail discussing the tactics and strategies of the debt collectors in wearing down folks until they made payments on the deceased debts, even when they were under no obligation to do so! 

Unless the debt was jointly held, like a co-signed note or a joint mortgage, they own your ass, but only until the last breath at which point you are free at last.  The collectors try to con and connive until they squeeze something past that last puff to get their money.  Amazingly, some end up paying for the same reasons that Graeber argues our distant forbearers did thousands of years ago, because it seemed moral.

Now that interest rates, fake charges, and bait-and-switch rule too much of the credit industry, the morality has leeched out of the entire enterprise, so good people should let the debts lie and the dead rest without a penny of guilt or remorse.

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Courts Become Gateway to Debtors Prison

NDebtew Orleans A harrowing article in the Wall Street Journal documented the success that bottom fishing debt collection agencies are having at ripping the last pennies from working families being crushed in court over relatively small claims.  I wish this were news, but of course the story is all too familiar.

The big debt predator companies are buying the debt for 3 and 4 cents on the dollar and then almost immediately going into court where borrowers are virtually defenseless.  In most cases the debtors do not appear in court since they have no representation and instead find themselves victimized by the so-called “system of justice” with more fines, court fees, penalties and an added burden of cumulative costs that may lead the original debt to increase by anywhere between 25% and 100%.  In effect judges and courts are becoming the screws for a new kind of debtors’ prison where people are on “permanent parole” and tethered to the escalating debts that are increasing even when they are being paid, little by little.

Journal reporter, Jessica Silver-Greenberg, does a service by at least naming names, not that they would feel much embarrassment over their tactics and tools:

The four largest publicly traded debt buyers—Encore, Asta Funding Inc., Asset Acceptance Capital Corp. and Portfolio Recovery Associates Inc.—purchased $19.6 billion in distressed debt last year. They typically recover three times what they spend buying debt, according to the Association of Credit and Collection Professionals, a trade group.

Behind the screen not surprisingly we find more Wall Street raptors:

Wall Street has taken notice. J.C. Flowers & Co. LLC, the private-equity firm, has a 24% stake in Encore. BlackRock Inc. owns 6.9% of Portfolio Recovery Associates, a Norfolk, Va., company. In October, the company reported its highest quarterly revenue ever.

In 2006, One Equity Partners, the private-equity arm of J.P. Morgan Chase, purchased Pennsylvania-based NCO Group, which posted $1.56 billion in revenue last year, making it the largest debt-collection company.

Analysts say that this raid on the last vestiges of citizen wealth will only become more intense in coming years given the debts of the recession.

Is there any hope for the consumer?  It seems that the Debt Protection Act says that if you haven’t paid eventually there is a statute of limitations of 5 to 7 years after you have been sued, if you can wait the collectors out and live with the consequences.

I’m not arguing that we celebrate deadbeats, but the system has to be fair and now it’s not.   Advocates and Actions has argued that we need to be ready to appear with the consent of the debtor family in court to advocate for relief from the judge, so there is at least some chance of allowing a family to get back on its feet and come back to dry land.

This is a misuse of the judicial system where no representation only equals more debt and intimidation.

Years ago when I was on the board of the GNO AFL-CIO when we would interview the countless judges that would come before us at every interview the story of a long deceased past president, Lindsay Williams of the Seafarers, would be told to one candidate after another.  Brother Williams, as the tale was told, would explain patiently to each candidate that we represent our members and what we need from a judge is an open door policy because sometimes a situation requires “not only justice, but mercy.”

These are situations that cry for mercy, but we have to organize the ability to raise up the voices to ask for both justice and mercy.

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