When facing what feels like a crushing amount of debt, you may be tempted to resign yourself to feeling hopeless and alone. This is understandable, given how society tends to treat debt like a personal problem—your mistake, your job to deal with the consequences. But debtors’ unions are trying to change that.
A debtors’ union is a group of people harnessing collective power to fight for better conditions in our financial lives. Their promise is that by joining together with others facing similar struggles, you can gain power, knowledge, and support on the road to financial freedom. Here’s what you need to know about debtors’ unions, and why you might want to join one.
What is a debtors’ union?
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A debtors’ union is an organization that helps people collectively negotiate, validate, and dispute personal debts. Joining a debtors’ union can be a helpful strategy when you are facing financial hardship from medical bills, student loans, credit cards, payday loans, or other debt. Debtors’ unions provide strength in numbers, expertise, legal support, and a sense of community, helping members take control of their debt, repair their credit, and build financial independence.
Why join a debtors’ union?
According to the most prominent organization of its kind, the Debt Collective, “joining your union brings you into a community of debtors, ensuring your voice is heard in our campaigns and strategies.” It also gets you, “access to trainings that help you to fight and cancel debt for yourself and others.”
In a workplace, workers unionize to create the working conditions they desire and believe they deserve, whether that means demanding higher wages, setting fairer hours, or securing better healthcare. Similarly, a debtors’ union uses collective power to defend its members interests. In practice, this looks like fighting for the renegotiation and abolition of debts, increased access to publicly-funded goods (education, healthcare, housing, etc), anti-racist economic policies, and much more. Broadly speaking, joining a union is a good thing.
More specifically, one of the primary advantages debtors’ unions provide is leverage in negotiating with creditors and collectors. On your own, creditors have all the power to set terms, penalties, and interest rates on what you owe. But standing together with other debtors gives you collective bargaining power to lower interest rates, reduce penalties, and even have portions of balances owed forgiven. Unions have professional negotiators who know how to best work with creditors to lower members’ debt burdens.
Additionally, unions offer access to financial experts who can forensically examine your accounts and spot any errors or fraud. If lenders acted illegally or unethically in calculating your debt or attempting to collect on it, the union has the legal resources to call them out and get the debt forgiven or discounted.
How to join a debtors’ union
Evaluate your needs
First, take stock of your current debts. Make a list of who you owe money to and how much. This helps you understand the scope of debts you need help with. Debtors’ unions generally assist with unsecured consumer debts from credit cards, medical bills, utilities, auto loans, and the like. They do not deal with secured debts like mortgages.
Research different debtors’ unions
The Debt Collective is the big one, but there are several reputable national and regional debtors’ unions to consider joining. Do some research to find ones that operate in your state and the types of services they provide. Look for established non-profit organizations with a track record of delivering results for members. Some key services to look for include:
- Debt negotiation. Unions negotiate with creditors and debt collectors to reduce how much you owe.
- Debt defense. Unions audit debts for errors and fight unfair collections practices.
- Credit counseling. Unions help members improve credit scores and manage budgets.
- Education. Unions inform members on consumer rights and smart money management.
Once you have evaluated your debts and researched unions, think about your specific needs. Consider the amount and types of debt you need help with. Also think about what services matter most—whether negotiating lower payoffs, fixing credit report errors, or getting collectors off your back. This helps you determine which union may be the best fit.
Join your union and participate in collective action
When you find a debtors’ union that matches your situation, join it. Attend meetings, follow their advice, and stay engaged in the process. The more you put into it, the more a union can help negotiate and resolve your debts on favorable terms. Be patient, as the process can take time. With persistence and the leverage of collective action, many members finally experience debt relief.
Debtors’ unions grant consumers combined power and expertise to tackle unmanageable personal debts. If your debts are beyond your ability to address alone, joining a reputable debtors’ union can provide welcome support and help you find real solutions.
Meanwhile, here’s our guide to getting organized to pull yourself out of debt. If you need professional help reviewing and managing your debts, here’s our guide to hiring a financial advisor who won’t rip you off.