Seconded, and I’m sorry that they’ve taken the obvious toll on you and yours. I’ve had small debts that I’d forgotten about catch up to me–the old Sears card with $28 on it, $11 from a newspaper service back in the day–and the Mr. Evans that previously had my mobile number gets calls all the time from collection agencies. Fortunately they haven’t argued with my saying I’m not this Evans person–that would rankle something fierce.
My parents went bankrupt when I was a kid, so I had to learn for myself that going bankrupt is not the shameful thing our culture seems to want it to be. I’m willing to bet this industry hasn’t gotten any oversight because of that cultural mistake.
The stupid part is that, while bankruptcy is unambiguous, I don’t believe there’s a legal definition of “insolvent.” If there is, I’ve never seen it, and therefore it does not exist.
It’s not a shameful thing at all. After all, businesses do this all the time. Furniture stores will go bankrupt, sell off all their inventory in a giant “going out of business” sale, and then re-open in the same location under a new name. Construction companies will go bankrupt and then open a new company under a new name (I’ve seen first hand how blatant this can be: Scumbag Development goes bankrupt and a new company called Scumbag Development II opens up in its place).
Yet when a person decides to make the potentially sound financial decision to declare bankruptcy and discharge their debt they are seen as being unethical scumbags. When a business does it it’s considered a sound strategy.
I know it doesn’t change what you suffer and continue to go through, and that logically you already know this, but criminal debt collectors are thieves, and they’re the shameful ones, not you. And hey, I’m an unapologetic capitalist, but this goddamn new feudalism isn’t a free market, it’s predators using their wealth to secure more by manipulating the legal system to protect them for stealing from you. These people are scum and our only shame is that we don’t put them in prison.
You might want to take some affirmative action and sue them to “quiet the claim” against you. Essentially seeking a declaration of the court that you do not owe that debt. If successful you can use it to show to the credit agencies.
If you haven’t made a payment to the debt in over 6 years it might be past the statute of limitations in your state. Making it unenforceable in court. The only thing collection agents can do is harass you and report the debt to a credit bureau. You can legally restrain them by sending WRITTEN NOTICE that you will not accept phone calls and will only contact you by mail. You have to give them written notice. Over the phone doesn’t help. As for the credit bureau, the suit to quiet the claim would erase that.
Sadly, many of these criminals won’t follow the law because criminal criminal prosecutors don’t see going after them as politically expedient. If a victim fights back and takes them to court, they’ll pay the fine and be back at it again under a new LLC through three or four shell companies within a month.
Insolvency – if you don’t go through bankruptcy but don’t have the assets to pay the debt, part of it is not taxable.
Student loans – under some circumstances
Underwater mortgages – this was part of one of the bailout/recovery bills, and is time limited
Accrued interest that would have been tax deductible (mostly for student and mortgage loans)
Gifts. Gifts are never taxed as income, as long as it is a genuine gift, although it counts towards the giftors estate tax exemption, or they may have to pay gift taxes.
Of these, #2 probably applies to a lot of people, but isn’t a complete exemption. #6 is the most likely way out, but Opera giving away cars was not considered a gift because she got promotional value for it. That would likely apply to John Oliver, but it might be possible to structure it so that they gave the debts to a charity which then forgave them, and the charity wasn’t.
It wasn’t on the list of exceptions I saw, but medical costs > 10% of your income are tax deductible. Since this was medical debt, that may also apply – the “income” received from the debt forgiveness was used to pay for medical bills, generating a nearly matching deduction.
Anyway, I agree that this is not something to try unless you have very good tax lawyers, but I assume HBO has exactly that.
One more thing, while loan forgivness is definitely income, medical debt is not a loan, and the price is arbitrary. I recently had a medical bill with a list price of > $1300 “negotiated down” to $70 by our insurance company. That isn’t debt forgiveness or income, but just a sale price. So depending on how it is structured, it might not actually count as income. Again see a good tax lawyer – this is just speculation.
I suspect it’s deliberate. What he’s doing is very much not comedy, but he still needs to be able to claim the plausible deniability of a late night comic. I think that he is trying to separate the jokes just enough to remind people that this is no laughing matter.
ie: Much like Jon Stewart consistently answering FOX’s accusations of bias and lacking journalistic integrity with “hey- I’m just a comedian here…” It’s more than just comedy, but being able to cloak themselves with that mantle is what gives them the freedom to tackle the stuff they do.
They don’t even need to do that- Just bundle the name, logo, and other intellectual property as one more liquidatable asset, and sell it off during the bankruptcy to a shell company that lo and behold, you also just happen to own.
I suspect that supply and demand would bite you in the ass on that one. So long as it’s known that much of the debt is simply blood-from-a-stone uncollectable, it trades vastly below face value to people willing to harass the debtors in the hopes of recovering a few more pennies on the dollar than they paid for it.
Were some sort of large scale buyout to become visible, the stuff would become considerably more valuable, since holders of debt could expect that do-gooders might show up to try to take it off their hands.
It is also likely that the debt you can buy most cheaply is the stuff where the debtor is most screwed: the people who have jobs, just not earning enough to ever get ahead of what they owe, are valuable ‘customers’ since they can be milked over time(if not for the face value of their debts, certainly for real money). The retiree with a giant pile of medical debt is much less valuable, since they have basically zero chance of ever paying much of what they owe unless they have a house or other asset that can be gouged out of their estate when they finally die.(which is to say, I don’t think that I made this clear, that it is comparatively cheap to help the genuinely just-can’t-pay-ever get fewer calls from bill collectors; but if you want to buy the debt that is eating an alarming percentage of some poor bastard’s paycheck for most of their adult life, it’ll cost you, precisely because that is actually valuable debt. Harassing sick old people is disgusting, of course; but it’s also the area where less wealth transfer is happening, because there simply isn’t anything left to transfer. Having someone spend their entire career treading water is less mustache-twirlingly-villainous; but far more profitable and an excellent way to ensure that that person will achieve roughly zero wealth accumulation over their lifetime.)
It’s a nice idea; but it seems likely to become increasingly costly and difficult if you were to scale it up.
It’s sort of like those charities that buy and free people in various flavors of contemporary slavery-by-other-means: It’s hard to fault their motivation; but they also help establish a floor price and a guaranteed buyer.
One of the issues that Slate brought up is that is that John Oliver’s company didn’t necessarily buy an exclusive right to collect on this debt. It might have been sold a few times over…
Oh. a tip is hidden in that slate critique that strikes me as critically important.,.
And though I’m not familiar with the precise rules in Texas (where Oliver’s paper came from), collectors will often use tricks to reset the clock on old debts, sometimes by getting people to make a small payment.*
Forget local criminal prosecutors. Go big with the Federal Trade Commission. Their whole reason for existence is to go after shady predatory companies.
Like all government regulatory agencies meant to protect the public, the FTC is underfunded. But it gives people something to hang their hat on in terms of issues. Politicians who talk of deregulation are telling the public in their own way, they want to screw over the little guys.
Its an old debt collection trick. The purpose of the statute of limitations is to punish people who essentially abandon their legal claims and wait too long to sue. But if you made a payment to the old debt. The clock gets set back to the date of the last payment. The debtor can now say they didn’t abandon their claims, just that its taking a while to collect.
