This is not legal advice and if you try to take it as such, then you are stupid.
http://www.telegraph.co.uk/finance/financialcrisis/9682263/Occupy-Wall-St-protesters-wipe-5m-off-Americas-debt.htmlPure, god damn brilliance.
"If we raise $50,000, then we can get rid of $1,000,000 in debt." Yup. And that sounds like it might work actually. Pennies on the dollar will purchase "bad debt." That is, debt that nobody really thinks is collectable. The whole point here is, these people aren't trying to collect it, it's being forgiven, expressly not collected and expressly canceled. Even if the numbers are a bit off, and it's $1,000,000 for every $100,000 raised, that's still not bad at all.
There are some drawbacks, like having the forgiven debt counted as "income," under IRS code 64(a) (4-5) and IRS Code 108. That is the IRS doesn't count the money you get given to you as a loan as "income," because you're allegedly going to pay it back. If it comes up that you get so you are never going to pay it back (bankruptcy, etc), then it can be included as income in your tax return. <--- This is a pitfall. However, especially if you are in a low tax bracket or have legitimate deductions, you'd much rather pay 25% of all that debt you owe to the IRS and thus the government, than some debt collector. That's absolutely right, if you had say... $100,000 of debt discharged and/or forgiven this way, you'd owe the IRS income taxes on that amount. I'd still rather pay the IRS $35,000 rather than some debt collector $100,000. The IRS has payment plans....
So basically our country has been sold out from under us, but the good news is, we could buy it back. It doesn't matter that we shouldn't have to buy it back, the point is that we can and it might be a legit way to actually make something happen.
Let's use the $100,000 per $1,000,000 figure (10 cents on the dollar to purchase bad debt). Do you realize what that means? If somehow these or otherwise legit people could purchase all the defaulted student loan debt, medical bills facing bankruptcy possibility, credit card debt, etc. and they could raise $1,000,000 in funding to purchase that debt that somehow got classified as "bad debt," then they'd wipe out $10,000,000 in debt to give real people a start over....
Now let's say they raised $100,000,000 (One Hundred Million Dollars) in donations, that would be about $0.33 (Thirty-Three cents) for just about every man woman and child in the United States (actually less today). If you use that ratio, then $100,000,000 wipes out $1,000,000,000 (One Trillion Dollars).
That would basically wipe out all the student loan, credit card, medical bill, and perhaps various other types of debt that currently can't be realistically paid back in the US.
The problems and reasons why this wouldn't work: a.) people won't part with the $0.33, b.) it's hard to find somebody to trust with all that money, c.) the debt collectors might wise up to the plan and screw it over, d.) you'd still have approximately 1/3 of the amount owed to the IRS as tax income (but that is actually a better outcome), and e.) cynicism.
This is why the government should nationalize the bad debt collection industry and buy it up.... $0.33 per every person in the country.... Bad debt goes poof, tax revenue goes up. Problem freaking solved.