By ZOLA ROSS-GRAY and IRATI EGORHO DIEZ, ages 10
When people need money, they often go to a bank to take out a loan with high interest rates. If the borrower (the debtor) can’t pay the loan back, the bank sells the debt to a debt buyer, who then sells the debt to a collection agency. Then the collection agency aggressively chases the debtor to get all of the money.
The Rolling Jubilee was launched in November 2012 by a group called Strike Debt, which started in NYC but now has branches across the U.S. The Rolling Jubilee raises money to buy debts from the debt buyer before they get to the collection agency. Instead of collecting the debts, Strike Debt abolishes them. The group held a fundraiser with performers, and they use their website for people to donate money. According to Laura Hanna, “we started the Rolling Jubilee to relieve people of their debts and to educate people about the debt market and how unfair it is.”
Rolling Jubilee and the debt cycle
1) Debtor: The person who decides they need a loan to help them pay for something they don’t have enough money for right now.
2) Bank Loan: An amount of money that a debtor borrows from a bank
3) Debt buyer: Someone who buys the debt for pennies on the dollar, and sells it at a profit.
4) Rolling Jubilee (www.rollingjubilee.org): A Strike Debt program that buys the debt and abolishes it. (www.strikedebt.org)
5) Collection agent: Someone who purchases debt from the buyer and hunts down the borrower to extract the original amount plus additional fees.
Debt: Money owed from a loan with interest added.
Foreclosure: When the bank takes away the house of someone who can’t pay back the loan borrowed to buy it.