Debt, a photo project

DebtPortrait22

Spurred by her own financial hardship experiences, photographer Brittany Powell embarked on "The Debt Project," a series of formal photo portraits of myriad Americans in debt accompanied by their handwritten debt stories and, eventually, audio interviews. Powell is hoping to complete the project with funding from a Kickstarter campaign.

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David Graeber and Thomas Piketty on whether capitalism will destroy itself

Graeber wrote the magisterial Debt: The First 5,000 Years; Piketty, of course, wrote the essential Capital in the 21st Century -- in a must-read dialog, they discuss their differences and similarities and offer views on whether capitalism will collapse.

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The more your job helps people, the less you're paid (and vice-versa)


In this spectacular, long interview with Salon, David "Debt" Graeber builds on his bullshit jobs hypothesis and points out the horror of modern American work: if your job does some good, you are paid less; jobs that actively hurt people are paid more; and no one seems to want a world where no one has to work anymore. But have no fear: it ends on a high note: a proposed "revolt of the caring classes."

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Free science fictional graphic novel about the student debt conspiracy


Christopher Kosek writes, "'The Default Trigger' is a 52 page, free (with a pay what you want version available) digital graphic novel about student loan debt, the shadowy figures lurking in the background who watch over our struggles and their insidious conspiracy to keep this cycle going. It's written and illustrated by me, Christopher Kosek. Plot (with spoilers): When a recent college grad, Joseph Doakes, defaults on over $100k in student loans,"

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Debt collectors illegally hound people who don't owe money

A third of people who complain about debt-collectors who break the law say they don't even owe the money under discussion. Of the victims who complained to the Consumer Financial Protection Bureau about being hounded for money they don't owe, two thirds say they never owed it, and a third say they had already paid it off. Debt-collectors call wrong numbers or hassle people with names similar to those of debtors. They call them at work and at home, and use threats and obscene language when they're told they've got the wrong person. One offender, CashCall Inc, is being sued over its practices, and was separately ordered to refund $14M in debts it collected through fraudulent robo-signing. Cory 46

Meet Educational Credit Management Corporation, the arm-breakers of the student debt racket


An private contractor to student debt-holders has a special legal department that goes to bankruptcy court to argue that student loans shouldn't be discharged in bankruptcy, ever. The Educational Credit Management Corporation contracts to the Department of Education, on whose behalf it argues (for example) that debtors who go bankrupt fighting pancreatic cancer should still have to pay back their student loans in full, because "Survival rates for younger patients tend to be higher."

Student debt is the most pernicious kind of debt. It's debt that you take on when you're a teenager, and it's the only debt that can be taken out of your Social Security check. But as bad as the student debt racket is (and it's bad -- no, I mean really bad), I hadn't quite clocked how depraved its bagmen and enforcers could be.

They've been censured by courts for their strongarm tactics, bills have been introduced to make them behave, but they seem unstoppable. Why not? The precarious job-market has convinced Americans to go into $1 trillion worth of student debt, and when that collapses, it'll make subprime look like small change. So, realistically, who's ever going to stop thug bill-collectors from torturing people with terrible illness, or caring for severely disabled loved ones, or facing other unimaginable hardship, in order to bleed whatever they can for the debt-holders who're depending on that trillion bucks being repaid?

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Student debt and tuition hikes: destroying the lives of America's children


In Rolling Stone, Matt Taibbi takes a long, in-depth look at the scandal of student loans and tuition hikes, a two-headed parasite sucking America's working class and middle class dry as they plunge their children into a lifetime of ballooning debt in the vain hope of a better, college-educated future. The feds keep backing student loans, and the states keep cutting university funding, so the difference is made up by cranking up tuition and shifting the burden to future grads. Meanwhile, the laws that prohibit discharging student debt in bankruptcy, combined with ballooning default penalties (your $30K debt can rocket to $120K if you have a heart-attack and are bedridden and can't make payments) and the most ruthless, unsupervised, criminal collection agencies means that tens of millions of Americans are trapped in a nightmare that never ends -- student debt being the only debt that can be taken out of your Social Security check. Matt Taibbi is a national treasure, and Rolling Stone does us all a service by keeping him working.

If this piece moves you and you want to learn more, Don't miss "Generation of Debt," an important pamphlet on the subject from UC students.

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Bank forecloses on wrong house, changes locks, steals tons of stuff, won't compensate owner in full


On Popehat, Ken details the astounding story of Katie Barnett, whose home was burglarized by agents of the First National Bank of Wellston, Ohio, who mistook her house for one that they were foreclosing upon. The bank broke into her house, changed the locks, and got rid of many of Barnett's possessions.

The local police refuse to get involved, and the bank's CEO, Anthony S. Thorne, is refusing to reimburse her in full for her possessions, which were stolen and destroyed by his company. Thorne says that because Barnett can't produce receipts for all of her goods (because who does that?) (and also, even if she had, they'd have been in her burglarized house), and because her recollection of her stuff doesn't match the "inventory" of the bungling bank employees who stole everything she owned, he will not pay her full compensation.

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Interview with Suicide Girls about Homeland, the sequel to Little Brother

My next novel, Homeland (the sequel to Little Brother) is out in a few weeks, and I recently sat down with Nicole Powers from Suicide Girls for an interview about the book and the issues it raises, especially the student-debt bubble:

When it was just rich people going, it wasn’t about just getting a better job, because you were already rich, you already had the entré into the better job. You could already do unfunded apprenticeships and your parents’ friends were the people offering you the unfunded apprenticeships. You had a good five ways within the system. But now it’s a market transaction, and once it’s a market transaction we start applying cost benefit analysis to it. We start saying, well if the university degree earns you so many pounds, then it makes sense to start talking about you paying so many pounds. And if the objective here is to take people whose lifetime income expectancy was so many pounds, and make it a little bit higher –– which is what we call social mobility –– then why shouldn’t that be a virtuous cycle and they pay back into it. That way the university can expand the number of students they take on and all the rest of it, right?

The problem with that is that it’s become a Ponzi scheme, especially in America. We haven’t quite gotten there here. But in America, you have this crazy thing where it is somewhat true and it’s also universally received as true, that you can’t get a good job without a university degree. It’s also the case that universities, including many state colleges –– that are actually owned by the public –– can act as loan originators, which is to say they lend you the money but where those loans are then backed by the federal government. They can lend you any amount of money because there’s no risk to them because the government will take the loan off their hands. Those loans are then further secured by the federal government when they float them as bonds. So you have this weird perverse incentive where the universities, the more they charge the more they get –– which is a bit weird right? Because in real market economies, the more you charge the more you get up to a point, and then people start going, wait a second, that’s not worth it anymore, and they stop paying in. But if I tell you that you can’t get a job unless you get a degree, and then I tell you that no matter how much the degree costs I can get you a loan for that much, all of a sudden you start getting takers for those crazy propositions and that starts to look like a bubble, like a pyramid scheme.

Cory Doctorow: Homeland

Why the stuff you don't see at the museum matters

Chicago's Field Museum isn't just a science museum. It's also a research center, especially for archaeologists and anthropologists who come to the museum to make use of its extensive collections of artifacts — only a tiny fraction of which is on public display at any given time. Unfortunately, the museum is currently up to its neck in debt, and part of the current administrators' plan to deal with that problem is to restructure the research department and cut back on curators and staffing there.It's hard to understand why this has the archaeology community so on edge unless you really understand what the Field Museum has in those vast Indiana-Jones-inspiring storage collections. Here's Michael Smith, an archaeologist who studies the ancient Aztecs, explaining why the Field Museum is so important to his work and that of his colleagues.

The photo above shows an Aztec flute in the museum. I have excavated many small fragments of these objects in Aztec domestic middens, but never an entire example. When one just has the animal's ear, or a segment with a hole, or a fragment of the mouthpiece, it is hard to figure out just what these are pieces of. It is through study of the whole flutes in the Field Museum or other museums that I learned to interpret the tiny fragments of musical instruments, and of many other unusual items, from my excavations. Or consider our knowledge of Aztec music. Scholars such as Adje Both have reconstructed aspects of Aztec music by studying flutes like this and by playing them (and recording the tones and doing analyses of the sound diagrams). Museums are the only places with the resources for such research, and the Field Museum is one of the most important in the U.S. and the world.

Read a Chicago Tribune story on the Field Museum's debt problem.

Rolling Jubilee: Occupy raising money to buy up, and wipe out, debts


David "How to Sharpen Pencils" Rees describes the Rolling Jubilee, a project from Occupy Wall Street to buy up, and zero out, other peoples' debts:

Now OWS is launching the ROLLING JUBILEE, a program that has been in development for months. OWS is going to start buying distressed debt (medical bills, student loans, etc.) in order to forgive it. As a test run, we spent $500, which bought $14,000 of distressed debt. We then ERASED THAT DEBT. (If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME.)

This is a simple, powerful way to help folks in need — to free them from heavy debt loads so they can focus on being productive, happy and healthy. As you can see from our test run, the return on investment approaches 30:1. That’s a crazy bargain!

Now, after many consultations with attorneys, the IRS, and our moles in the debt-brokerage world, we are ready to take the Rolling Jubilee program LIVE and NATIONWIDE, buying debt in communities that have been struggling during the recession.

We’re kicking things off with a show called THE PEOPLE’S BAILOUT at Le Poisson Rouge on Thursday, November 15. It will also stream online, like a good ol’-fashioned telethon!

I just put in $100, which will erase $3000 worth of someone's debt.

The People’s Bailout

HOWTO send vulture debt collectors packing

"Defending Junk-Debt-Buyer Lawsuits" is a paper written by Peter A. Holland of the University of Maryland Francis King Carey School of Law and published in the May 1 issue of Clearinghouse Review. It's a clear, short, absolutely readable (and indispensable) guide to fending off speculative lawsuits from vulture debt-collectors. These are the debt collectors who buy up bad debts that banks and other creditors have written off (because there's insufficient evidence that the debt exists in the first place, or because it's past the statute of limitations, or because the debtor has been through a bankruptcy). Then they bulk-file lawsuits against the debtors, hoping that they won't show up in court to defend themselves, so that the vultures can win judgments and use them to go after houses, cars, salaries and so on. As Naked Capitalism's Yves Smith puts it, these vultures are buying up a lot of scrap paper, hoping to find a lottery ticket.

It's surprisingly easy to fend off these bottom-dwellers, though. They have to prove that you owe them money. A brief moment spent scrutinizing the documents filed against you is usually enough to find evidence that will get the case dismissed. Holland's paper explains in detail just what to do to get these vampires to flee from your door:

Read the complaint and accompanying documents multiple times, highlighter in hand, while looking for intentional deceptions, errors, and omissions that could help your client prevail. First, look for defects on the face of the complaint. For example, the named plaintiff might be a different corporation from the entity named in the supporting documents. This occurs with surprising frequency. Second, if your state requires debt buyers to be licensed as debt collectors, check whether the debt buyer is licensed. Suing without a license creates standing issues, and, according to an increasing number of courts, it constitutes a violation of the Fair Debt Collection Practices Act.16 The junk-debt buyer is subject to the Fair Debt Collection Practices Act because the junk-debt buyer allegedly acquires the debt after default.

Third, look for the failure to prove the existence of (or the terms and conditions of) the alleged underlying contract. Failure to prove the contract is the rule rather than the exception. Often a contract is not even attached to the complaint. More often, some well-worn photocopy sample of a terms-and-conditions mailer is attached. This sample is often illegible, and almost never signed by the consumer. On close inspection, the printing date on this document often reveals that it was generated years after the account was allegedly opened. Also, the terms and con- ditions submitted may not be from the original creditor identified by the junk-debt buyer but are presented to make the claim appear supported.

Fourth, the debt buyer is usually unable to prove a complete and unbroken chain of title. Without a valid chain of title, the debt buyer does not have standing to sue.

Defending Junk-Debt-Buyer Lawsuits (via Naked Capitalism)

(Image: Vulture, a Creative Commons Attribution Share-Alike (2.0) image from 7704782@N07's photostream)

City of Berlin owes trillions of euros to small town

The German town of Mittenwalde loaned the city of Berlin 11,200 guilders 540 years ago, when Mittenwalde was a seat of power. Berlin has never repaid the debt. With interest, and adjusted for inflation, the note (which has been authenticated) is worth trillions of euros, and Mittenwalde wants it back.

Town historian Vera Schmidt found the centuries-old debt slip in the archive, where it had been filed in 1963. Though the seal is missing from the document, Schmidt told Reuters that she was certain the slip was still valid.

"In 1893 there was a debate in which the document was examined and the writing was determined to be authentic," Schmidt said.

Schmidt and Mittenwalde's Mayor Uwe Pfeiffer have tried to ask Berlin for their money back. Such requests have been made every 50 years or so since 1820 but always to no avail.

540-year-old debt. Trillions owed. But will German village get repaid?

Innovative dystopias

An essay by Matt Stoller called "Profit-Driven Surveillance and the Spectrum of Freedom" on Naked Capitalism looks at the way that analytics, real-time tracking, and the for-profit prison and debt industry combine to produce a dystopia: "In fact, whether you are tracked because you get a discount on your auto insurance or whether you have broken some arbitrary rule or fit in a non-mainstream class of person, innovation in technology and autocratic organizational forms means that there will be a whole new category of constraints on freedom."

There are innovations in injustice that could accompany these products. Traditional illicit corporate profit-taking has been about denying certain products to segmented groups of people – segregation in housing, lower quality of medical care for ethnic and gender groups, predatory lending etc. But technology has now opened up a new model of profit-taking – if a company knows where you go, who you talk to, what you buy and eat, and your medical history, then it can charge you premium pricing by denying you exactly what *you* want. It can bypass your ethnographic group, and focus on tolling off component parts of what you as an individual want.

Imagine a new financial product targeted at people who have defaulted on debt and have a history of avoiding debt collectors. It’s a new kind of credit card, by a bank, which offers a reasonable rate of interest. You don’t have to put up cash or collateral. You don’t have to pay on time. The catch is that the financial institution requires that you wear a small tracking device on your ankle, so that their debt collection department knows where you are at all times. And if you violate the terms of service, the device blares out messages from debt collectors, wherever you are. The device could also be set up to blare out messages whenever you enter a “restricted zone”, say, a shopping mall or a store that the bank has put off limits to you.

Or imagine that a corporation decides that new employees must wear one of these for the first 30 days of employment, to ensure that he or she isn’t tardy, and to more accurately clock people in and out of work. The technology exists, and is being marketed, by private corporations. And it is being used by private corporations everywhere in America, to track tens of thousands of people. I drew this example from a specific device that could do this is called the ExacuTrack One) – the web page describing its technology leaves open all sorts of chilling possibilities. The reason you haven’t noticed is because these products are tracking prisoners, ex-felons, and people on parole.

Profit-Driven Surveillance and the Spectrum of Freedom: “We will offer electronic monitoring services in every state.”

Universities hold students' transcripts hostage over debt

American universities -- whose grads often owe six-figure debts that can't be discharged in bankruptcy, and that can even be charged against their Social Security checks -- are increasingly engaging in the (legal) tactic of refusing to provide transcripts to grad schools or employers as a means of extorting payment out of students who get behind. A good summary of what this means comes from NYU's Andrew Ross, a prof who helped start Occupy Student Debt: "It's worse than indentured servitude. With indentured servitude, you had to pay in order to work, but then at least you got to work. When universities withhold these transcripts, students who have been indentured by loans are being denied even the ability to work or to finish their education so they can repay their indenture." Dave Lindorff writes in the LA Times:

It's no accident that colleges are using the withholding of official transcripts to punish students behind in their loan payments. It turns out the federal government encourages the practice. Schools are not required by law to withhold transcripts, but a spokeswoman at the Department of Education confirmed that the department "encourages" them to use the draconian tactic, saying that the policy "has resulted in numerous loan repayments."

It is a strange position for colleges to take, however, since the schools themselves are not owed any money. Student loan funds come from private banks or the federal government. For federal Perkins loans, schools get a pool of federal money to apply to students' financial aid, and if students don't pay, that pool gets smaller. But the creditor is still the government, not the college. And in the case of so-called Stafford loans, schools are not on the hook in any way; they are simply acting as collection agencies, and in fact may get paid for their efforts at collection.

In Southern California, USC's website makes it clear that unmet loan obligations can prevent students from getting transcripts. As for the University of California, Kate Jeffery, director of student financial support for the system, says transcripts are withheld in the case of delinquent Perkins loans. She concedes it's a difficult issue but says that "it's the only tool we have to make them pay."

Holding transcripts hostage (via /.)