Debtor's Revolution: Are Debt Strikes Another Possible Tactic in the Fight Against the Big Banks?

[marmar]

AlterNet / By Sarah Jaffe

Debtor's Revolution: Are Debt Strikes Another Possible Tactic in the Fight Against the Big Banks?
What does it mean to stop cooperating with the banks? Some activists, organizers, and technologists think the answer might be mass refusal to pay debts.

November 3, 2011 |


In the gorgeous, purple-and-green-lit Lower East Side headquarters of the Angel Orensanz Foundation, nearly 300 techies, activists and thinkers gathered, shouting out ideas for social justice-minded Web projects that they would break into small groups to attempt to hash out in a day.

A man in a plaid shirt stood up and told the moderator and the crowd, “I want to create a tool for organizing debt strikes.”

The man was Thomas Gokey, an artist and adjunct professor at Syracuse University, and his idea wound up one of the four “winners” at ContactCon, a conference hosted by Douglas Rushkoff that urged people to think of solutions to the problem of the corporate-controlled Internet—and by extension, the world. The project, nicknamed “Kick-Stopper,” is in the works, but Gokey notes that he's far from the only person out there suggesting, especially in the wake of Occupy Wall Street's successes, that it's time for some more serious, organized direct action around the issue of debt.

“I wanted to do this project because I kept having the same basic conversation with everyone at Zuccotti and everywhere else,” Gokey told me. “When I talk to people about what we could do that would really compel Congress and Wall Street to meet our demands or really alter the current system, we inevitably start discussing what non-cooperation with our own oppression would look like. What does it mean to stop cooperating with the banks? What we inevitably end up describing is some variation of a debt strike, simply ending our own participation in a system that exploits us.” ...............(more)

The complete piece is at: http://www.alternet.org/story/152963/debtor%27s_revolution%3A_are_debt_strikes_another_possible_tactic_in_the_fight_against_the_big_banks/

[dkf]

1. Won't this just jack up people's rates and have their access to debt cut off?

Good luck with that one.

[Fuddnik]

2. If you refuse to pay, who gives a shit what the interest rate is?

Just like AIG and low credit default swaps premiums. They had no intention of paying, so nobody gave a shit as long as they got their bonuses and salaries.

[dkf]

3. Well if you never want another loan because you have cash then that is fine.

[socialist_n_TN]

4. I've been mentioning this for years as a another possible

tactic in the class war.

However, you're wrong about "...never want another loan...". I've had two bankruptcies (seven and thirteen) and reestablished credit within a year of discharge and payoff. And it's relatively easy to do.

The meme of "destroying your credit for life" is just bullshit.

[dkf]

5. What kind of rates did you get?

[MedicalAdmin]

28. I've done a bankruptcy 8 years ago.

2 years ago I borrowed $120,000 @ 6%.

A credit record is Not solely your history but rather a judgement of your ability to earn and repay.

FYI - small banks are more likely to take a nuanced and real view of you as a person and community member.

[intheflow]

8. It is just bullshit.

It's like the "it'll go on your permanent record" meme we all got in high school. I dropped out of high school and not one employer or college ever gave a shit about it. In 30 years being out as an adult in the banking-run world, I've found exactly the same to be true. They want your money and don't give a shit about your past debt.

[backscatter712]

18. Exactly - it's another version of the "This'll be on your permanent record!" scare tactic.

Your FICO score will recover quickly once you're done with bankruptcy, or the debt collectors give up on you.

[tcaudilllg]

22. dkf there will always be credit unions.

The point is to destroy the big banks. Actually, a debt strike would result in a lot of vaporized wealth, but only among those who really have it. It would vastly equalize wealth in this country.

[backscatter712]

6. And we're not having our interest rates jacked and access to debt cut already?

We're rapidly approaching the point where we've got nothing to lose.

We've got an entire generation of kids who are five or six figures in debt from student loans, got degrees, did what they were told to get good jobs, only to see the jobs fail to materialize.

They've got nothing to lose from debt strikes.

[bemildred]

7. That is the real point.

"Freedom's just another word for nothing left to lose."

[grasswire]

15. thank you for that reminder n/t

[TBF]

29. Well I have already done a version of this,

just refused to pay. It can take awhile to get everything negative off your credit, but we're pretty close to buying a house now. Refused to pay about $100K in credit card debt - a bunch of it to Citibank and mostly because they were such assholes to deal with.

Even with help from credit repair it takes awhile, may actually be quicker with bankruptcy (but we also had massive student loans which we have been paying, so that is a factor in our rate as well).

I have to think if a lot of people either refuse, or simply can't pay, it's going to bring down a lot of scores and then your own score doesn't look so bad.

I will say if I had to do it again I wouldn't have the cards, but I was young and foolish. Completely admit that. But the banks are also very predatory (at least the big ones are) and deserve some of the fault for loading people up with credit (incl. ridiculous interest rates) and then refusing to work with them on paying it back - perhaps they get a better tax break by just writing off the debt?? Dunno, but it all needs to be revamped and re-regulated as far as I'm concerned.

[yodermon]

9. won't they just sue you and get a judgement against you & garnish your wages? n/t

[backscatter712]

10. That's when you get creative and move your money around so they can't get at it.

A few judicious countersuits against creditors, and you've got things stopped up in court for years!

[backscatter712]

11. Also, if you don't have a job or house, you're judgment-proof.

In order for them to seize your assets, you've got to have assets to seize.

[backscatter712]

12. Also, other ways to game this: Have groups of strikers skip one payment.

That's enough to cause great financial pain to the banksters, but games the rules in such a way as to ensure that the consequences won't be so heavy people can't bear them.

[Fuddnik]

13. I really thought about it a fw weeks ago.

American Express sent me a letter saying they were jacking me up to the penalty rate.

I called a said, "What's up with this?"

AE "You've been late 3 times in the last year".

Me "In the 10 years I've had that card, I have NEVER been late on a payment"

AE "Your online banking payments can sometimes take up to a week to be sent"

String of yelling and much profanity.

Me "Close this account and stick this card up your ass. It might be 'possible' for a payment to take up to a week to clear. More likely, you're delaying processing so you can add fees and interest rates. I monitor other online payments to Visa, etc., and they seem to be processed THAT DAY."

AE "Well you're a valued customer, and we can straighten this out".

Me And you're fucking assholes, who are trying to screw me. I only use that card for Costco, because it's their card, and for merchants that I don't particularly like, because you rape them on fees. Stick the card up your ass.

[Sherman A1]

17. Well Played!

:toast:

[yodermon]

19. thx for the replies, backscatter. I like the idea of "rolling non-payment strike"

With some coordination this could be pretty effective.

[socialist_n_TN]

16. That's what the bankruptcy laws are for

That's ANOTHER system that we could overwhelm if we all filed. And they can't do ANYTHING while you're awaiting a court date.

[tcaudilllg]

23. that's a rally point against pols who support garnished wages laws.

[grasswire]

14. be sure to read the comments section

I found the comments both heartening (because people are thinking outside the box of ways to stop the juggernaut) and very sad (those who yearn to avenge the crimes Wall Street perpetrated on their grandparents in the 20th century).

[rapturedbyrobots]

20. some friends and i have been talking about this

for a LONG time.

the main issues is that your credit is screwn. but as a counter point...many working poor people have shit credit anyway.

our basic conclusion is that you can't do it alone. you need a support group. in this case, there should be at LEAST one person in each support group with excellent credit but little debt that can serve as a 'credit portal'... an emergency resource in case shit hits the fan. it is nice to have a credit card / loan accessible in case you need to pay an emergency medical bill, or something like this.

the question is how many debt strikers can each 'credit portal' realistically serve?

you also need a LOT of trust among the people involved.

but i think it is completely possible to execute this. and with the visibility of the OWS + Bank Transfer movements, there might even be a critical mass to make it worthwhile.

[Ilsa]

21. Won't work for me.

They'd take the net proceeds from sale of the house after getting a judgment, ruin my credit rating, etc.

I guess this is viable if you have nothing left to lose, like no job, no home, etc.

[tcaudilllg]

24. The main point of this is that we've allowed ourselves to become dependent on the wrong people.

[socialist_n_TN]

25. Not if you do a BK before they get the judgment

Of course everybody's situation is different and it wouldn't be for everyone. Hell, I couldn't do it on the mortgage because I've paid on it so long that it would be profitable for the bank to foreclose. IOW, my loan-to-value ratio is VERY low which would make foreclosure and resale (even at auction) a profit maker for the bank. And if you're in that situation, don't do the strike. At least on that one particular loan.

However, are you planning on selling the house? If you're NOT, any judgment against YOU can't take effect until the house is paid off or sold. If you don't sell the house, the judgment just sits there until you do or until you pay the house off. They CAN'T force you to sell your house just to satisfy a civil judgment until you own it free and clear.

[Ilsa]

26. Moving out of state. House has to be sold. We have lots of equity in it.

I have two kids, too, so it is likely we'll buy again and probably need a mortgage.

[socialist_n_TN]

27. In your case, then don't do it. At least not on that particular

loan. I'm a grunt in the mortgage biz and just as an FYI, you now have to wait 2 years after a BK before you can get another mortgage. It's 3 years if you have a foreclosure involved in the bankruptcy. Or for that matter it's 3 years if it's a foreclosure period, with or without a bankruptcy.

You'll need your credit at a 620+ level too to qualify for the new mortgage, so a repayment strike might not be for you. You can support the resistance in other ways.

That's the thing about these various ideas. Everybody has to decide because of EACH INDIVIDUAL'S CIRCUMSTANCES how much they can do. But what's important is that you do what you can.