People in Debt Have Formed a Union to Fight Back

In November, Pennsylvania permitted the resumption of utility shutoffs during the pandemic. In advance, the local Debt Collective, which helps people dispute their debts and fight back against predatory fees, protested. The group helped organize a gathering of between 20 and 30 protesters in Philadelphia to demand the moratorium continue. “We are tired of this,” Pennsylvania Debt Collective organizer Lauren Horner told CBS. “We are tired of the greed displayed by these organizations.” Horner was referring to the Philadelphia Gas Works, the PECO Energy Company, and to what some in the Debt Collective regard as the negligence of the Public Utility Commission.

The Pennsylvania Debt Collective had some wins: for households whose incomes fall within 300 percent of the poverty level, or $78,600 per year for a family of four, the moratorium still holds. On January 4, the Debt Collective and other community organizations will protest outside Biden headquarters in Philadelphia, demanding an end to all federal student loan debt. These groups want the debt cancelled on day one of his presidency. As with the utility shut off, the Pennsylvania Debt Collective has been very active around this issue.

Unpaid utility bills have long burdened American families. The U.S. has become a nation of debtors since the 1970s, people yoked into serfdom by educational or medical debt or into jails by cash bail, fines and fees. And then there are the millions who live month to month, on their credit cards, racking up charges for necessities like food and utilities, which they may never be able to repay.

Now also, during the COVID-19 pandemic, renters have gone into debt and face eviction. “I am currently working on an anti-eviction tool, eviction defense,” Debt Collective organizer and national member Dawn Lueck told Truthout. “We’re in a coalition. I’m just working on the tool side, to get it into people’s hands. There’ll be a massive eviction wave on January 31 when moratoriums expire, so we’re trying to get this tool ready.”

Lueck says that the tool is an online form that takes a tenant through the questions that need to be answered to deal with an eviction notice. It generates all the necessary forms. Some jurisdictions like Los Angeles require a fee to apply for an eviction waiver, and the tool helps the user see if they are eligible for an eviction waiver before they apply and pay the fee. “We’re in a coalition connected to tenant unions,” Lueck says, “so this tool currently for L.A. will later be expanded to other cities — we hope. Fingers crossed, we can scale this through California and then maybe nationwide.”

Another huge reservoir of financial insecurity is medical debt, which is the number one cause of U.S. bankruptcies — 66.5 percent of them. Before the pandemic, medical debt was roughly $81 billion. Student loan debt stands at $1.7 trillion. And those too poor to pay their debts to the criminal court system are sometimes locked up in jail.

But as Lueck and the Pennsylvania Debt Collective show, some people drowning in debt fight back. The Debt Collective has roots in Occupy Wall Street and launched officially in 2014. It boasts 9,000 members on its online platform and a strong presence on social media. It started forming chapters in early fall and has 11 of them so far. Since the chapters are in their infancy, membership is small and some just have a few organizers.

The Debt Collective has a small staff of a half a dozen organizers. Spokesperson Astra Taylor told Truthout via email that the collective’s activities are expanding: They’ve published a useful book, Can’t Pay, Won’t Pay, and their combined efforts have succeeded in “the elimination of $1.8 billion in debt [over $1 billion of that was educational debt] to date,” Taylor told Truthout. “That has happened through a range of strategies, including our various dispute tools, legal efforts and the Rolling Jubilee Fund, which we have used to extinguish debt portfolios we have purchased and that we have acquired through other means.”

The Debt Collective operates as a debtors’ union that provides useful tools for debtors to dispute any debt in collections, to dispute errors in a credit report, wages being taken or a tax return being taken, and tools to defend against repayment for federal student loans. The group’s first debt strike was in 2015. “We have thousands of people in our network and are moving toward a dues-funded model with regional hubs or chapters,” Taylor said.

Meanwhile, the group is also building an app to dispute bail bonds in California. “‘Cash bail’ is a misnomer,” Taylor says. “It should be ‘credit bail,’ because most people have to borrow to post bail, and they borrow from predatory bond companies.” According to Taylor, the median bail debt is $50,000 in California, and even if charges are dropped, people who post bond “are still stuck with the bill,” from those predatory lenders. The Debt Collective’s app will help people dispute their debts by invoking various consumer protections, while also recruiting users to join the Debt Collective to fight for structural reforms. Taylor foresees expanding this work to other states besides California.

“The starting point for debtor organizing,” writes Debt Collective co-founder Hannah Appel in a 2019 Dissent article, “is to ask what would happen if we saw the staggering $13.5 trillion in total household debt as a source of collective leverage, rather than aggregate individual liabilities.” Appel argues that debtors’ unions can leverage mass indebtedness “through the threat of collective nonpayment…. Debtors’ unions could demand mortgage write-downs, an end to racist lending practices, a cap on ballooning adjustable interest rates, student debt discharge, truly free public education, single-payer health care or an end to money bail and extractive criminal justice fees.”

In his organizing, Jason Wozniak of Philadelphia’s Debt Collective chapter focuses on the problem of “predatory inclusion.” That means fighting against a neoliberal economy in which members of marginalized groups are provided with access to the housing market or education market or any other market on predatory terms. “The last housing crisis in 2008 was an example of that,” Wozniak says. “So’s the current student debt crisis.” He observes that with $1.7 trillion in educational debt it means roughly 45 million people owe student loans. Wozniak argues that it was a conscious decision by Ronald Reagan Republicans and many Democrats to hike tuition, in part to quell campus protest, so that now students can only access education by going into debt. Indeed, while governor of California, Ronald Reagan was the first really to boost tuition and cut funding at state colleges and universities. Other governors followed his lead. That was the beginning of the end, in the 1970s, of affordable higher education.

In the past year, Wozniak reports, the Debt Collective has launched jubilee schools — three- to four-week classes — with debtors across the country, which include a history of where debt comes from. This popular education effort encourages debtors not to feel ashamed and isolated because of what they owe. These jubilee schools have become popular fora, leading to new Debt Collective chapters in Philadelphia; Washington, D.C.; New York; Los Angeles; the Chicago region; Northern California and Massachusetts.

The Debt Collective educates people about their options. Some of these, the government simply fails to inform debtors of, says Jenny Lezan, coordinator for the Chicagoland chapter: things like income-based repayment options or the Borrower’s Defense to Repayment application. She says that volunteers walk people through the process, work with student debtors and call servicers. The Debt Collective was behind the Corinthian 15’s debt strike which resulted in a group of students having their student loans cancelled.

Lezan was the first in her family to graduate high school and attend college. She says she grew up in a single-parent household in poverty on the west side of Chicago and was recruited to the Art Institute directly in high school with what she now knows are unethical sales and recruiting practices. Forced to take out student loans to cover tuition, Lezan has maintained a minimum of three jobs at a time since college, but says many of the jobs she has had to take are contract-based and don’t offer benefits like insurance. Lezan went back to school in 2009 for an MBA and now carries roughly $175,000 in student debt. This spurred her to fight back, so she organized the Chicago debtors’ union. “We are on strike,” Lezan says of the current national effort. “I don’t want my loans ‘forgiven,’ I want them CANCELED.” She says she is fighting for a better future for her two daughters, for them to have an education without a debt burden like hers.

Taylor, Lezan and Wozniac say the Debt Collective does not back specific politicians. “We are ORGANIZING, and we are based in social justice and reparative reforms,” Lezan writes. “We are not backing politicians, we are not making back-door deals like some of these other student debt organizations, who are connected to big money … our movement is fueled by regular, every day, working-class people. We are actively pushing for change in legislation.”

Lueck, the organizer working on the eviction tool for tenants, recounts how a life-threatening car accident at age 18 led her to declare bankruptcy, because she had no health insurance. She later helped run debt clinics in New Orleans. “We had free health fairs. Democratic Socialists of America partnered with the Debt Collective and provided health screenings. Other cities picked up the health fair idea from New Orleans. COVID-19 interrupted these fairs. Now it’s a hybrid debt clinic online,” Lueck tells Truthout. In the clinics, debtors fill out an intake sheet to determine how comfortable they are with discussing their debt. “Some people would bring their collection notices, and we’d help them cope with that. And we’d mail certified letters and continue to follow up. I’m not a credit counselor, though. I’m a debt disputer. We agitate over why people shouldn’t have this debt.”

“Always dispute the collectors,” Lueck advises debtors. “The collection industry is so unregulated. We find predatory collection all the time, where collectors don’t have correct documentation and operate outside the statute of limitations.”

Regarding nationwide goals, the Debt Collective is urging President-elect Joe Biden to cancel all student debt, according to Wozniak.

“The big push now is our Biden Jubilee 100 campaign, to push him to erase student debt, which he can do, when he takes office” without congressional approval, Wozniak says. “Now is the moment. We want to turn up the heat for Biden to abolish student debt. All of it. Because it’s the moral thing to do.”