Radical ideas to extinguish your debt

It's not fun anymore. Yep. Gonna give it up. That whole paying off debt thing wasn't for me. Really was never that into it anyway. So ... do you mind paying it off for me, please?

No doubt that this has crossed the minds of pretty much everyone, including me. I never thought it realistic, though. I mean, I got myself into this mess, so it's my duty to clean it up. But perhaps I've just never thought of the alternatives.

Two organizations have. They are the nonprofit Adbusters -- a self-described "global network of artists, activists, writers, pranksters, students and entrepreneurs who want to advance the new social activist movement" -- and the progressive political blog Pirate Caucus. They say that paying off your personal debt should be more of a communal responsibility than an individual one. Their Web sites have different ideas of how to manage this, but it boils down to consumer-based organization and action.

Give the gift of a zero debt
A blog post on Adbusters's Web site proposes the creation of a "Blackspot Debt Collection Agency." The agency would buy people's debt and burn it. Generally, when some cannot pay back the money they borrowed, the lender sells the debt to a third-party collection agency that tries to collect it. If the agency can't collect, it sells it again and again if it has to. Existing debt collection agencies, which include Asset Acceptance Capital and CreditMax LLC , then look at a debtor's credit scores to see which ones are likely to pay. Then they go after them by using the included home and work phone that comes with each sale of someone's debt to demand payment.

Once debt is resold several times, it's worth pennies on the dollar because the chances of it being recovered are tiny. The image to the right shows a still from a debt-selling Web site that's vending $14,407 in credit card debt from someone living in Austin, Texas, for $228. There's a market for it, too. According to an MSN article, debt buyers were estimated to seize $110 billion of delinquent debt in 2006.

The Blackspot Debt Collection Agency would act as a privately funded, third-party collection organization by buying people's debt. But instead of going after debtors, it would buy the delinquent account and forget it. It wouldn't be limited to credit card debt either. People with debt from car loans, mortgages, student loans, medical bills and more could be included. It's like Santa coming and instead of leaving presents, he sits at your kitchen table and pays all of your bills in full.

Ideas floating around as to how the agency would work include setting up a database consumers could use to buy back their debt at an amount closer to the original amount borrowed and without the interest that might have made it unpayable. This would be like having the database in the above picture, but restricting it to consumers. Other ideas include the option of groups of people -- or even relatives -- banning together and buying someone's debt as a present or charitable act. (E-mail me to further discuss this issue). The agency could also buy all the debt of a particular ZIP code or even a small country in need. Uh, how about the United States?

But what if I don't want to wait for someone to help me out?

Power to the people
The Pirate Caucus blog proposes the idea of a debtor's union, which would organize people in order to get what Citi, JPMorgan Chase and others got -- a fat bailout. Basically, a bunch of people with student loans, medical bills or any other types of debt would get together and consolidate their delinquent balances into one massive default. They would then refuse to pay it, and either force the debt to be written off or attempt to renegotiate the debt at a discount with the lenders. It's a forced bailout for Joe the Plumber, Tito the Builder and uh, Bozo the Clown.

According to one comment on the blog, the purpose of the debtor's union is to "destroy the power of the banks and the finance industry." Another said the union would demolish the authority that Wall Street has over the economy and give it to the people. The author of the debtor's union article, Keith, said once a majority of people refuse to pay, they can demand better wages, affordable housing, free education, socialized health care and public transportation -- all of which without make people go into debt.

Sound a little like whining to you? Me, too. I'm reminded of two summers ago when I helped my friend's moving company out for a day. We loaded a huge TV in a van and drove out to a trailer park. But the toy was too big to fit through the trailer door, and the resident had to settle for a smaller size. It's this type of living beyond our means that gets you into debt trouble.

My advice: Grow up, stop pouting, and quit using your credit so loosely.

Supporters of the debtors union don't buy that, though. They say no matter how irresponsible people are with their credit, it's simply unjust for the banks to force people to pay back four or five times the amount of what they borrowed (I would put a crying smiley face here if I could). Plus, if a bank lends someone money and doesn't take the chance to look at his or her income beforehand, the bank is taking an equally foolish risk as the person borrowing the money, said one blogger.

Yeah. These are radical ideas, but radical ideas are regularly morphed into rational ones as they pass through the collective discussion. And regardless, given the shape we're in now, a little creative thought is everything we need to help us climb out of this mess.

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Note:This post is included in the 183rd edition of the Carnival of Debt Reduction hosted by Greener Pastures. The carnival highlights successful business women, some of who date back to 1875. Head on over and check it out.

See related: Phone line makes me popular with debt collectors, Sample debt collection letters, I'm not a deadbeat, but I play one on my cell phone