For Chicagoans struggling to make ends meet, the daily act of checking the mail can be anxiety-inducing. Aside from birthday cards and holiday letters, there isn't often much good news, but there never seems to be any shortage of bills or debt collection attempts.
Soon, when bright yellow envelopes appear in thousands of mailboxes around Cook County with the words "RIP Medical Debt" on each one, recipients might assume it's yet another bill. In reality, those envelopes contain the opposite, a potentially life-changing gift.
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A network of area churches this summer banded together to take on the debt collection system that profits "on the backs of poor people"; to help restore bad credit marred by medical debt; and to inspire joy, said the organizers, the Rev. Otis Moss III and the Rev. Traci Blackmon. As a result, Moss said they've wiped out more than $5.3 million in medical debt, and they soon plan to send letters to nearly 6,000 Cook County residents with a no-strings-attached message: "May you have a beautiful, wonderful holiday. Your debt has been forgiven. Enjoy Thanksgiving."
"People don't know that they're going to receive this," Moss said. "And it's my imagination that there will be 5,888 families in Cook County that will be shouting and thanking God that their debt has been forgiven."
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Blackmon, who lives near St. Louis and is a leader in the United Church of Christ, of which Moss' Trinity Church is part, said last Thanksgiving she read about a nonprofit called RIP Medical Debt, which was founded by former debt collection agents. She reached out to Moss with the idea of partnering with the nonprofit to raise money to explicitly target areas in Cook County where many people live below the poverty line, including Englewood, Roseland, Auburn-Gresham, Washington Heights, and West Pullman.
Though churches have always given back to members of their own congregations, one of the unique parts of this program is that church membership, or even belief in God, is not necessary, nor is there a campaign goal beyond extending kindness.
"We see Cook County as our parish," Moss said. "And our job is to ensure that you, in some form or fashion, will experience the compassion, the love, the care and the generosity that flows from God's heart. That's what we're called to do. So you will receive debt forgiveness whether you are Christian, Muslim, Jewish, humanist, secular, agnostic, atheist, whether you're black or you're white. The only criteria that we laid out is that we want to make sure the most vulnerable are in line. Or as Scripture says, 'The last shall be first.' "
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Moss said United Church of Christ also worked with the Leadership Network, a West Side collective of Baptist churches serving predominantly black neighborhoods. Blackmon said a common refrain was to ask people to bring in the change or small bills gathered in the bottom of a purse or a coin jar. The effort began in early summer, and as of this month had raised $38,000. And because debt is available for purchase from creditors for pennies on the dollar, that amount erased more than $5.3 million in debt, Blackmon explained.
The original creditor — a hospital, doctor or ambulance company — often will write off a debt after a few years. That's when third-party collection companies buy the debt for pennies on the dollar, figuring there's money to be made even if they only recuperate a portion of the total debt. Those companies then ding the credit of an individual who owes, which has a profound effect on their ability to qualify for a mortgage or rent, or affected someone's ability to get a job that requires good credit, Blackmon said.
The average debt for local families of $907 cost less than $2 to eliminate through RIP Medical Debt, she said. That's part of why this cause has been so important to her, as negotiating away debt was only available to insiders and large-scale debt purchasers prior to the founding about five years ago of RIP Medical Debt, a New York-based nonprofit.
Blackmon reiterated some of the points commonly made by the nonprofit: The most common cause of bankruptcy in the United States is medical debt, and in 75% of such bankruptcies, the person had health insurance. And while some people owe hundreds of thousands of dollars, the debt is usually significantly smaller.
"The feel-good story is a great thing, but if you have written off this debt anyway, there are practical implications to your life in having it eliminated," she said.
The Rev. Matthew Fitzgerald, pastor at St. Paul's United Church of Christ — one of the participating churches — said even with good insurance, he knows firsthand how hard it can be to keep up with payments after copays, a high deductible and contributions to the plan premium.
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"I've dodged calls from a collection agency. It is a miserable experience. I can't imagine the strain of doing so without any insurance at all."
He said that being struck down by an illness or an accident is a misfortune, but having that pain "compounded by the underhanded tactics of parasitic collection agencies" is to have that misfortune turned into tragedy.
"Sometimes it seems there is very little grace in the world. Or at least, we don't give each other much grace. What joy, to open a letter saying 'your debt has been forgiven' instead of a letter saying, 'we're coming after you. Pay up.' "
Daniel Lempert, spokesman for RIP Medical Debt, said the nonprofit already has eliminated more than $900 million in debt since its inception and is on track to wipe out $1 billion by the end of the year, in part by working with some 70 faith-based groups on similar campaigns this year alone.
The nonprofit was co-founded by Jerry Ashton and Craig Antico, "two former collection industry executives who decided to put their industry experience and expertise to work to forgive debt rather than collect on it," according to the nonprofit. Ashton attended an Occupy Wall Street event in 2011 and "was particularly inspired by the group's brief foray into abolishing medical debt," and decided to take action since he had the insider knowledge to make it a reality, Lempert said.
He said hospitals often only employ one full-time internal collection employee for each 8,000 to 12,000 accounts, which is why it's later sold to outside collection agencies at such a low cost.
RIP Medical Debt has worked on technology that allows it to geographically locate debt, allowing it to partner with fundraisers in specific areas, he explained.
"We go to trusted, approved secondary debt buyers and earmark the ones that fit our criteria," Lempert said. "We'll say, this is the portion of this account we would like to purchase. We're purchasing the accounts of those who are factually not likely to be able to pay and we're paying for them — though often at a very, very steep discount."
The group also works with TransUnion, one of the three main credit reporting companies, and can ensure the debt is removed from a person's credit report. That was another reason the nonprofit was so attractive to Blackmon, particularly in a neighborhood such as Englewood, where she said the annual average income is $22,000.
"We also know these are populations where people move often," Blackmon said. "They can be transient and they may not set up mail-forwarding services — so they may never even see the letter. But with that extra step of removing (the debt) from a credit report, they don't have to see the letter to reap the benefit."
Lempert said some people who receive letters may assume it's more bad news in the mail, or they don't trust that it's a gift, although the group tries to put a campaign organizer's logo on the letters. And while the Chicago letters haven't yet gone out, RIP Medical Debt has years of experience when it comes to the thank-you notes that come flooding in after a campaign.
"There are cases with people not believing it's real, because there's not much of a precedent for this type of a gift in their lives," Lempert said. "But we do absolutely hear from people after the fact, and — now that there's been so much written about us — people will often say, 'I got the letter and I Googled you and I just want to say thank you so much.' "
The gift also can spark a chain reaction, because once someone feels some control over their financial destiny, they're more likely to feel a renewed sense of purpose behind their bill-paying efforts.
"For some people they'll say, this has empowered me to tackle the rest of my debts, or now I feel better getting a car loan or a mortgage," Lempert said.
Moss was able to reveal the final figures to congregants whose donations made the campaign a success. Moss said they set an initial goal of wiping out $1 million in local medical debt, but the final numbers were staggering.
"We should never place a price on someone's life and then place a value on who should be able to thrive, based on income. It's just immoral," Moss said. "When I announced to the congregation what we were going to do, they were so excited. No matter what they've been able to give, they're directly involved in purchasing someone's debt, and people especially were so excited about the opportunity to bless someone anonymously.
"Our hope is that other organizations will follow suit and do the same," he said.
Blackmon wants those who receive the letters to remember a few things: It's real, it's a gift and there's no ulterior motive.
"It's not a recruitment ploy," Blackmon said. "It's just what we believe it means to be church."
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