Debt Reduction & Debt Relief
Debt Reduction & Debt Relief
Debt Reduction & Debt Relief
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Page 2 of 147
Walk by Faith; Serve with Abandon<br />
Expect to Win!<br />
Page 3 of 147
Page 4 of 147
The Advocacy Foundation, Inc.<br />
Helping Individuals, Organizations & Communities<br />
Achieve Their Full Potential<br />
Since its founding in 2003, The Advocacy Foundation has become recognized as an effective<br />
provider of support to those who receive our services, having real impact within the communities<br />
we serve. We are currently engaged in community and faith-based collaborative initiatives,<br />
having the overall objective of eradicating all forms of youth violence and correcting injustices<br />
everywhere. In carrying-out these initiatives, we have adopted the evidence-based strategic<br />
framework developed and implemented by the Office of Juvenile Justice & Delinquency<br />
Prevention (OJJDP).<br />
The stated objectives are:<br />
1. Community Mobilization;<br />
2. Social Intervention;<br />
3. Provision of Opportunities;<br />
4. Organizational Change and Development;<br />
5. Suppression [of illegal activities].<br />
Moreover, it is our most fundamental belief that in order to be effective, prevention and<br />
intervention strategies must be Community Specific, Culturally Relevant, Evidence-Based, and<br />
Collaborative. The Violence Prevention and Intervention programming we employ in<br />
implementing this community-enhancing framework include the programs further described<br />
throughout our publications, programs and special projects both domestically and<br />
internationally.<br />
www.TheAdvocacy.Foundation<br />
ISBN: ......... ../2017<br />
......... Printed in the USA<br />
Advocacy Foundation Publishers<br />
Philadelphia, PA<br />
(878) 222-0450 | Voice | Data | SMS<br />
Page 5 of 147
Page 6 of 147
Dedication<br />
______<br />
Every publication in our many series’ is dedicated to everyone, absolutely everyone, who by<br />
virtue of their calling and by Divine inspiration, direction and guidance, is on the battlefield dayafter-day<br />
striving to follow God’s will and purpose for their lives. And this is with particular affinity<br />
for those Spiritual warriors who are being transformed into excellence through daily academic,<br />
professional, familial, and other challenges.<br />
We pray that you will bear in mind:<br />
Matthew 19:26 (NLT)<br />
Jesus looked at them intently and said, “Humanly speaking, it is impossible.<br />
But with God everything is possible.” (Emphasis added)<br />
To all of us who daily look past our circumstances, and naysayers, to what the Lord says we will<br />
accomplish:<br />
Blessings!!<br />
- The Advocacy Foundation, Inc.<br />
Page 7 of 147
Page 8 of 147
The Transformative Justice Project<br />
Eradicating Juvenile Delinquency Requires a Multi-Disciplinary Approach<br />
The Juvenile Justice system is incredibly<br />
overloaded, and Solutions-Based programs are<br />
woefully underfunded. Our precious children,<br />
therefore, particularly young people of color, often<br />
get the “swift” version of justice whenever they<br />
come into contact with the law.<br />
Decisions to build prison facilities are often based<br />
on elementary school test results, and our country<br />
incarcerates more of its young than any other<br />
nation on earth. So we at The Foundation labor to<br />
pull our young people out of the “school to prison”<br />
pipeline, and we then coordinate the efforts of the<br />
legal, psychological, governmental and<br />
educational professionals needed to bring an end<br />
to delinquency.<br />
We also educate families, police, local businesses,<br />
elected officials, clergy, and schools and other<br />
stakeholders about transforming whole communities, and we labor to change their<br />
thinking about the causes of delinquency with the goal of helping them embrace the<br />
idea of restoration for the young people in our care who demonstrate repentance for<br />
their<br />
mistakes.<br />
The way we accomplish all this is a follows:<br />
1. We vigorously advocate for charges reductions, wherever possible, in the<br />
adjudicatory (court) process, with the ultimate goal of expungement or pardon, in order<br />
to maximize the chances for our clients to graduate high school and progress into<br />
college, military service or the workforce without the stigma of a criminal record;<br />
2. We then enroll each young person into an Evidence-Based, Data-Driven<br />
Restorative Justice program designed to facilitate their rehabilitation and subsequent<br />
reintegration back into the community;<br />
3. While those projects are operating, we conduct a wide variety of ComeUnity-<br />
ReEngineering seminars and workshops on topics ranging from Juvenile Justice to<br />
Parental Rights, to Domestic issues to Police friendly contacts, to mental health<br />
intervention, to CBO and FBO accountability and compliance;<br />
Page 9 of 147
4. Throughout the process, we encourage and maintain frequent personal contact<br />
between all parties;<br />
5 Throughout the process we conduct a continuum of events and fundraisers<br />
designed to facilitate collaboration among professionals and community stakeholders;<br />
and finally<br />
6. 1 We disseminate Quarterly publications, like our e-Advocate series Newsletter<br />
and our e-Advocate Quarterly electronic Magazine to all regular donors in order to<br />
facilitate a lifelong learning process on the ever-evolving developments in the Justice<br />
system.<br />
And in addition to the help we provide for our young clients and their families, we also<br />
facilitate Community Engagement through the Restorative Justice process,<br />
thereby balancing the interests of local businesses, schools, clergy, social assistance<br />
organizations, elected officials, law enforcement entities, and all interested<br />
stakeholders. Through these efforts, relationships are rebuilt & strengthened, local<br />
businesses and communities are enhanced & protected from victimization, young<br />
careers are developed, and our precious young people are kept out of the prison<br />
pipeline.<br />
Additionally, we develop Transformative “Void Resistance” (TVR) initiatives to elevate<br />
concerns of our successes resulting in economic hardship for those employed by the<br />
penal system.<br />
TVR is an innovative-comprehensive process that works in conjunction with our<br />
Transformative Justice initiatives to transition the original use and purpose of current<br />
systems into positive social impact operations, which systematically retrains current<br />
staff, renovates facilities, creates new employment opportunities, increases salaries and<br />
is data proven to enhance employee’s mental wellbeing and overall quality of life – an<br />
exponential Transformative Social Impact benefit for ALL community stakeholders.<br />
This is a massive undertaking, and we need all the help and financial support you can<br />
give! We plan to help 75 young persons per quarter-year (aggregating to a total of 250<br />
per year) in each jurisdiction we serve) at an average cost of under $2,500 per client,<br />
per year. *<br />
Thank you in advance for your support!<br />
* FYI:<br />
1 In addition to supporting our world-class programming and support services, all regular donors receive our Quarterly e-Newsletter<br />
(The e-Advocate), as well as The e-Advocate Quarterly Magazine.<br />
Page 10 of 147
1. The national average cost to taxpayers for minimum-security youth incarceration,<br />
is around $43,000.00 per child, per year.<br />
2. The average annual cost to taxpayers for maximum-security youth incarceration<br />
is well over $148,000.00 per child, per year.<br />
- (US News and World Report, December 9, 2014);<br />
3. In every jurisdiction in the nation, the Plea Bargain rate is above 99%.<br />
The Judicial system engages in a tri-partite balancing task in every single one of these<br />
matters, seeking to balance Rehabilitative Justice with Community Protection and<br />
Judicial Economy, and, although the practitioners work very hard to achieve positive<br />
outcomes, the scales are nowhere near balanced where people of color are involved.<br />
We must reverse this trend, which is right now working very much against the best<br />
interests of our young.<br />
Our young people do not belong behind bars.<br />
- Jack Johnson<br />
Page 11 of 147
Page 12 of 147
The Advocacy Foundation, Inc.<br />
Helping Individuals, Organizations & Communities<br />
Achieve Their Full Potential<br />
…a compendium of works on<br />
<strong>Debt</strong> <strong>Reduction</strong><br />
& <strong>Debt</strong> <strong>Relief</strong><br />
“Turning the Improbable Into the Exceptional”<br />
Atlanta<br />
Philadelphia<br />
______<br />
John C Johnson III<br />
Founder & CEO<br />
(878) 222-0450<br />
Voice | Data | SMS<br />
www.TheAdvocacy.Foundation<br />
Page 13 of 147
Page 14 of 147
Biblical Authority<br />
English Standard Version (ESV)<br />
Romans 13:8 Owe no one anything, except to love each other, for the one who loves<br />
another has fulfilled the law.<br />
Proverbs 22:7 The rich rules over the poor, and the borrower is the slave of the lender.<br />
Deuteronomy 28:12 The LORD will open to you his good treasury, the heavens, to give<br />
the rain to your land in its season and to bless all the work of your hands. And you shall<br />
lend to many nations, but you shall not borrow.<br />
Ecclesiastes 5:5 It is better that you should not vow than that you should vow and not<br />
pay.<br />
Psalm 37:21 The wicked borrows but does not pay back, but the righteous is generous<br />
and gives;<br />
Deuteronomy 15:1-23 “At the end of every seven years you shall grant a release. And<br />
this is the manner of the release: every creditor shall release what he has lent to his<br />
neighbor. He shall not exact it of his neighbor, his brother, because the LORD's release<br />
has been proclaimed. Of a foreigner you may exact it, but whatever of yours is with your<br />
brother your hand shall release. But there will be no poor among you; for the LORD will<br />
bless you in the land that the LORD your God is giving you for an inheritance to<br />
possess— if only you will strictly obey the voice of the LORDyour God, being careful to<br />
do all this commandment that I command you today. ...<br />
Proverbs 24:5-6 A wise man is full of strength, and a man of knowledge enhances his<br />
might, for by wise guidance you can wage your war, and in abundance of counselors<br />
there is victory.<br />
Deuteronomy 23:19 “You shall not charge interest on loans to your brother, interest on<br />
money, interest on food, interest on anything that is lent for interest.<br />
Deuteronomy 15:1-2 “At the end of every seven years you shall grant a release. And<br />
this is the manner of the release: every creditor shall release what he has lent to his<br />
neighbor. He shall not exact it of his neighbor, his brother, because the LORD's release<br />
has been proclaimed.<br />
1 Timothy 6:10 For the love of money is a root of all kinds of evils. It is through this<br />
craving that some have wandered away from the faith and pierced themselves with<br />
many pangs.<br />
Philippians 4:19 And my God will supply every need of yours according to his riches in<br />
glory in Christ Jesus.<br />
Page 15 of 147
Matthew 6:24 “No one can serve two masters, for either he will hate the one and love<br />
the other, or he will be devoted to the one and despise the other. You cannot serve God<br />
and money.<br />
Colossians 4:12 Epaphras, who is one of you, a servant of Christ Jesus, greets you,<br />
always struggling on your behalf in his prayers, that you may stand mature and fully<br />
assured in all the will of God.<br />
Romans 1:1 Paul, a servant of Christ Jesus, called to be an apostle, set apart for the<br />
gospel of God,<br />
Deuteronomy 24:6 “No one shall take a mill or an upper millstone in pledge, for that<br />
would be taking a life in pledge.<br />
Exodus 22:25 “If you lend money to any of my people with you who is poor, you shall<br />
not be like a moneylender to him, and you shall not exact interest from him.<br />
John 8:32 And you will know the truth, and the truth will set you free.”<br />
Matthew 18:1-35 At that time the disciples came to Jesus, saying, “Who is the greatest<br />
in the kingdom of heaven?” And calling to him a child, he put him in the midst of them<br />
and said, “Truly, I say to you, unless you turn and become like children, you will never<br />
enter the kingdom of heaven. Whoever humbles himself like this child is the greatest in<br />
the kingdom of heaven. “Whoever receives one such child in my name receives me, ...<br />
Proverbs 22:26-27 Be not one of those who give pledges, who put up security for<br />
debts. If you have nothing with which to pay, why should your bed be taken from under<br />
you?<br />
Deuteronomy 15:1 “At the end of every seven years you shall grant a release.<br />
Leviticus 25:36-37 Take no interest from him or profit, but fear your God, that your<br />
brother may live beside you. You shall not lend him your money at interest, nor give him<br />
your food for profit.<br />
Leviticus 25:1-55 The LORD spoke to Moses on Mount Sinai, saying, “Speak to the<br />
people of Israel and say to them, When you come into the land that I give you, the land<br />
shall keep a Sabbath to the LORD. For six years you shall sow your field, and for six<br />
years you shall prune your vineyard and gather in its fruits, but in the seventh year there<br />
shall be a Sabbath of solemn rest for the land, a Sabbath to the LORD. You shall not<br />
sow your field or prune your vineyard. You shall not reap what grows of itself in your<br />
harvest, or gather the grapes of your undressed vine. It shall be a year of solemn rest<br />
for the land. ...<br />
Page 16 of 147
Table of Contents<br />
…a compilation of works on<br />
<strong>Debt</strong> <strong>Reduction</strong> & <strong>Debt</strong> <strong>Relief</strong><br />
Biblical Authority<br />
I. Introduction: <strong>Debt</strong> <strong>Relief</strong>…………………………………………… 19<br />
II. <strong>Debt</strong> Consolidation………………………………………………….. 27<br />
III. <strong>Debt</strong> Restructuring………………………………………………….. 31<br />
IV. <strong>Debt</strong> Management Planning…………………………………….…. 37<br />
V. <strong>Debt</strong>-Snowball Method……………………………………………... 39<br />
VI. International <strong>Debt</strong> <strong>Relief</strong>…………….……………………………… 43<br />
VII. <strong>Debt</strong> <strong>Relief</strong> Countries………………………………........................ 49<br />
VIII. References…………………………………………………….......... 53<br />
______<br />
Attachments<br />
A. Strategies for Paying-Off <strong>Debt</strong><br />
B. <strong>Debt</strong>-Snowball Strategy<br />
C. Implications for International <strong>Debt</strong> <strong>Relief</strong><br />
Copyright © 2003 – 2018 The Advocacy Foundation, Inc. All Rights Reserved.<br />
Page 17 of 147
This work is not meant to be a piece of original academic<br />
analysis, but rather draws very heavily on the work of<br />
scholars in a diverse range of fields. All material drawn upon<br />
is referenced appropriately.<br />
Page 18 of 147
I. Introduction<br />
<strong>Debt</strong> <strong>Relief</strong><br />
Investopedia<br />
Reviewed by Julia Kagen<br />
Updated Dec 14, 2017<br />
Definition of <strong>Debt</strong> <strong>Relief</strong><br />
<strong>Debt</strong> relief is the reorganization of debt in any shape or form, so as to provide the<br />
indebted party with a measure of relief, either fully or partially. <strong>Debt</strong> relief can take a<br />
number of forms: reducing the outstanding principal amount (again, either partly or<br />
fully), lowering the interest rate on loans due, and/or extending the term of the loan,<br />
among others.<br />
Creditors may only be willing to consider debt relief measures when the repercussions<br />
of debt default by the indebted party or parties are perceived as being so severe that<br />
debt mitigation is a better alternative. <strong>Debt</strong> relief may be extended to any highlyindebted<br />
party, from individuals and small businesses, to large companies,<br />
municipalities, and sovereign nations.<br />
Breaking Down <strong>Debt</strong> <strong>Relief</strong><br />
In a number of situations, debt relief may be the only course of action. For example, if a<br />
sovereign nation with a massive debt load is finding it difficult to service its borrowings,<br />
its creditors may be amenable to restructuring the debt and providing relief, rather than<br />
risk the nation defaulting on its obligations and increasing global systemic risk.<br />
Page 19 of 147
<strong>Debt</strong> <strong>Relief</strong> in Developing Countries<br />
The Jubilee 2000 was a campaign in the 1990s by a host of NGOs, Christian<br />
organizations, and others to relieve developing nations of their debt by the year 2000.<br />
The petition had more than 21 million signers. Outcomes included wiping out<br />
approximately $100 billion of debt from 35 countries, along with increased awareness of<br />
the nature and scale of existing debt and the significant corruption behind much lending<br />
and borrowing. Government accountability subsequently grew in this regard. Savings<br />
were used to reduce poverty, fund health, education, and rebuilding programs in these<br />
nations. 32 of the 40 nations served were in sub-Saharan Africa.<br />
<strong>Debt</strong> <strong>Relief</strong> and Consumer <strong>Debt</strong><br />
Consumer debt consists of debts that are owed as a result of purchasing goods that are<br />
consumable and/or do not appreciate. In 2017, consumer debt was noted to have<br />
reached a new high of $12.8 trillion since the 2008 financial crisis. This has been<br />
attributed to soaring student and auto loans, along with total credit card debt. Options<br />
for mitigating consumer debt include speaking with a creditor about debt relief options,<br />
such as restructuring loan(s) and/or loan forgiveness, or declaring personal bankruptcy.<br />
Possible Drawbacks of <strong>Debt</strong> <strong>Relief</strong><br />
Possible drawbacks of debt relief are that it could encourage imprudent and reckless<br />
behavior by historically fiscally irresponsible parties. These parties could potentially<br />
embark on borrowing sprees in the expectation that their creditors will eventually bail<br />
them out.<br />
________<br />
from Wikipedia, the free encyclopedia<br />
<strong>Debt</strong> <strong>Relief</strong> or <strong>Debt</strong> Cancellation is the partial or total forgiveness of debt, or the<br />
slowing or stopping of debt growth, owed by individuals, corporations, or nations.<br />
From antiquity through the 19th century, it refers to domestic debts, in particular<br />
agricultural debts and freeing of debt slaves. In the late 20th century, it came to refer<br />
primarily to Third World debt, which started exploding with the Latin American debt<br />
crisis (Mexico 1982, etc.). In the early 21st century, it is of increased applicability to<br />
individuals in developed countries, due to credit bubbles and housing bubbles.<br />
nce the wealth and spending ability of the rich, many of whom will spend or invest this<br />
money in the rich countries, thus not even creating a trickle-down effect. They argue<br />
that the money would be far better spent in specific aid projects that actually help the<br />
poor. They further argue that it would be unfair to third-world countries that managed<br />
their credit successfully, or do not go into debt in the first place. That is, it actively<br />
encourages third-world governments to overspend in order to receive debt relief in the<br />
future. Others argue against the conditionalities attached to debt relief. These conditions<br />
Page 20 of 147
of structural adjustment have a history, especially in Latin America, of widening the gap<br />
between the rich and the poor, as well as increasing economic dependence on the<br />
global North.<br />
Origins<br />
Personal <strong>Debt</strong> <strong>Relief</strong><br />
<strong>Debt</strong> relief existed in a number of ancient societies:<br />
<strong>Debt</strong> forgiveness is mentioned in the Book of Leviticus (a Judaeo-<br />
Christian scripture), in which God councils Moses to forgive debts in certain<br />
cases every Jubilee year – at the end of Shmita, the last year of the seven year<br />
agricultural cycle or a 49-year cycle, depending on interpretation.<br />
<br />
<br />
<br />
This same theme was found in an ancient bilingual Hittite-Hurrian text entitled<br />
"The Song of <strong>Debt</strong> Release".<br />
<strong>Debt</strong> forgiveness was also found in Ancient Athens, where in the 6th century<br />
BCE, the lawmaker Solon instituted a set of laws called seisachtheia, and which<br />
canceled all debts and retroactively canceled previous debts that had caused<br />
slavery and serfdom, freeing debt slaves and debt serfs.<br />
In addition, the Qur'an (the Muslim scripture) supports debt forgiveness for those<br />
who are unable to pay as an act of charity and remission of sins for the creditor.<br />
Page 21 of 147
The injunction is as follows:<br />
If the debtor is in difficulty, grant him time till it is easy for him to repay. But, if ye remit it<br />
by way of charity, that is best for you if ye only knew.<br />
— Qur'an 2:280<br />
Contemporary<br />
In the United States of America for the years preceding the Financial crisis of 2007–<br />
2008, non-housing personal debt (auto loans, credit cards, student loans, etc.) rose<br />
significantly from approximately $2.05 trillion at the start of 2003 to a peak of $2.71 in<br />
Q4 of 2008. It was not until Q3 of 2012 that unsecured personal debt reached this level<br />
again. Since that time, unsecured personal debt has risen steadily to $3.76 trillion at the<br />
end of the third quarter of 2017. The other large change in unsecured personal debt is<br />
that an increasing portion of it is now student loan debt, from 12% in Q1 of 2003 to 53%<br />
in Q3 of 2017.<br />
The increasing size of the non-housing personal debt market and ease with which one<br />
can obtain personal credit has led to some consumers falling behind on payments. As of<br />
Q3 2017, student loans have the highest rates of serious delinquency (90 or more days<br />
delinquent) with approximately 9.6% of all student loan debt falling into this bucket.<br />
Credit card debt and auto loan debt have serious delinquency rates of 4.6% and 2.4%<br />
respectively.<br />
When consumers begin to fall behind on payments, they have several options to<br />
discharge the debt, either in full or in part. The first method is declaring bankruptcy,<br />
which has the immediate effect of stopping any payments made to creditors. In the<br />
United States, the two primary avenues of bankruptcy for an individual are Chapter<br />
13 bankruptcy and Chapter 7 bankruptcy. Another option is to consolidate these debts<br />
into a single loan, commonly known as debt consolidation. <strong>Debt</strong> relief, on an individual<br />
level, refers mainly to the negotiation for a reduction of a debt by either the consumer or<br />
a debt settlement agency. Through this arrangement, consumers agree to pay the<br />
creditor a fixed amount of money (generally a discount on their outstanding debt) either<br />
in a lump sum or under a payment plan. The debt settlement industry has had<br />
significant regulatory scrutiny since its inception with changes implemented in 2010 by<br />
the FTC. As the disposition of personal debt is a highly regulated industry, consumers<br />
are urged by the FTC and other trade organizations to do significant research and find<br />
an independent credit counselor to guide them through the process.<br />
Tax Treatment<br />
In US tax law, debt forgiven is treated as income, as it reduces a liability, increasing the<br />
taxpayer's net worth. In the context of the bursting of the United States housing bubble,<br />
the Mortgage Forgiveness <strong>Debt</strong> <strong>Relief</strong> Act of 2007 provides that debt forgiven on a<br />
primary residence is not treated as income, for debts forgiven in the 3-year period<br />
Page 22 of 147
2007–2009. The Emergency Economic Stabilization Act of 2008 extended this by 3<br />
years to the 6-year period 2007–2012.<br />
Bankruptcy and Non-Recourse Loans<br />
The primary mechanism of debt relief in modern societies is bankruptcy, where a debtor<br />
who cannot or chooses not to pay their debts files for bankruptcy and renegotiates their<br />
debts, or a creditor initiates this. As part of debt restructuring, the terms of the debt are<br />
modified, which may involve the debt owed being reduced. In case the debtor chooses<br />
bankruptcy despite being able to service the debt, this is called strategic bankruptcy.<br />
Certain debts can be defaulted on without a general bankruptcy; these are non-recourse<br />
loans, most notably mortgages in common law jurisdictions such as the United States.<br />
Choosing to default on such a loan despite being able to service it is called strategic<br />
default.<br />
Historical<br />
Alternatives<br />
If a debt cannot be or is not repaid, alternatives that were common historically but are<br />
now rare include debt bondage – including debt peonage: being bound until the debt is<br />
Page 23 of 147
epaid; and debt slavery, when the debt is so great (or labor valued so low) that the debt<br />
will never be repaid – and debtors' prison.<br />
<strong>Debt</strong> slavery can persist across generations, future generations being made to work to<br />
pay off debts incurred by past generations. <strong>Debt</strong> bondage is today considered a form of<br />
"modern day slavery" in international law, and banned as such, in Article 1(a) of<br />
the United Nations 1956 Supplementary Convention on the Abolition of Slavery.<br />
Nevertheless, the practice continues in some nations. In most developed nations, debts<br />
cannot be inherited.<br />
<strong>Debt</strong>ors' prison has been largely abolished, but remains in some forms in the US, for<br />
example if one fails to make child support payments.<br />
Contemporary<br />
In modern times, the most common alternatives to debt relief in cases where debt<br />
cannot be paid are forbearance and debt restructuring. Forbearance meaning that<br />
interest payments (possibly including past due ones) are forgiven, so long as payments<br />
resume. No reduction of principal occurs, however.<br />
In debt restructuring, an existing debt is replaced with a new debt. This may result in<br />
reduction of the principal (debt relief), or may simply change the terms of repayment, for<br />
instance by extending the term (replacing a debt repaid over 5 years with one repaid<br />
over 10 years), which allows the same principal to be amortized over a longer period,<br />
thus allowing smaller payments.<br />
Personal debt that can be repaid from income but if it is not being repaid may be<br />
obtained via garnishment or attachment of earnings, which deduct debt service<br />
from wages.<br />
Inflation<br />
Inflation, the reduction in the nominal value of currency, reduces the real value of debts.<br />
While lenders take inflation into account when they decide the terms of a loan,<br />
unexpected increases in the rate of inflation cause categorical debt relief.<br />
Inflation has been a contentious political issue on this basis, with debasement of<br />
currency a form of or alternative to sovereign default, and the free silver in late 19th<br />
century America being seen as a conflict between debtor farmers and creditor bankers.<br />
Inflation, in an economy that is growing, is caused by more money being introduced into<br />
circulation by the central bank. If the amount of tender remains constant, a<br />
currency grows or falls at the rate of the reserves that back it. The global prevalence<br />
of fractional reserve banking has caused most currencies to decline in value<br />
consistently. In a non-fractional (fully backed) reserve system, the growth of a currency<br />
is equal to the growth (or decline) of the assets backing it, fees are charged in an<br />
upfront manner, and money is worth by what it is backed.<br />
Page 24 of 147
Fractional reserve banking has resulted in a transfer of wealth from the holders of<br />
currency to investors. Under fractional reserve banking the money supply is allowed to<br />
be increased whenever new interest-bearing loans are issued and is often constrained<br />
by a reserve ratio, which mandates that banks hold a portion of the wealth they lend out<br />
at interest in the form of real reserves. Many nations are in the process of eliminating<br />
reserve ratios.<br />
<strong>Debt</strong> <strong>Relief</strong> in Art<br />
<strong>Debt</strong> relief plays a significant role in some artworks: in the play The Merchant of<br />
Venice by William Shakespeare, c. 1598, the heroine pleads for debt relief (forgiveness)<br />
on grounds of Christian mercy. In the 1900 novel The Wonderful Wizard of Oz, a<br />
primary political interpretation is that it treats free silver, which engenders inflation and<br />
hence reduces debts.<br />
In the 1999 film Fight Club (but not the novel on which it is based), the climactic event is<br />
the destruction of credit card records – dramatized as the destruction of skyscrapers –<br />
effecting debt relief. The 2015 television series, Mr. Robot, follows a group of hackers<br />
whose main mission is to cancel all debts by taking down one of the largest<br />
corporations in the world, E Corp.<br />
Page 25 of 147
Page 26 of 147
II. <strong>Debt</strong> Consolidation<br />
<strong>Debt</strong> Consolidation is a form of debt refinancing that entails taking out one loan to<br />
pay off many others. This commonly refers to a personal finance process of individuals<br />
addressing high consumer debt but occasionally refers to a country's fiscal approach<br />
to corporate debt or Government debt. The process can secure a lower overall interest<br />
rate to the entire debt load and provide the convenience of servicing only one loan.<br />
Overview<br />
<strong>Debt</strong> generally refers to money owed by one party,<br />
the debtor, to a second party, the creditor. It is generally<br />
subject to repayments of principal and interest. Interest is<br />
the fee charged by the creditor to the debtor, generally<br />
calculated as a percentage of the principal sum per year<br />
known as an interest rate and generally paid periodically at<br />
intervals, such as monthly. <strong>Debt</strong> can<br />
be secured with collateralor unsecured.<br />
Although there is variation from country to country and<br />
even in regions within country, consumer debt is<br />
primarily made up of home loans, credit<br />
card<br />
debt and car loans. Household debt is<br />
the<br />
consumer debt of the adults in the<br />
household<br />
plus the mortgage, if applicable. In<br />
many<br />
countries, especially the United States<br />
and the United Kingdom, student loans can be a<br />
significant portion of debt but are usually regulated differently than other debt. The<br />
overall debt can reach the point where a debtor is in danger of bankruptcy, insolvency,<br />
or other fiscal emergency. Options available to overburdened debtors include credit<br />
counseling and personal bankruptcy.<br />
Other consumer options include:<br />
<br />
<br />
<br />
debt settlement, where an individual's debt is negotiated to a lesser interest rate<br />
or principal with the creditors to lessen the overall burden;<br />
debt relief, where part or whole of an individual debt is forgiven; and<br />
debt consolidation, where the individual is able to acquit the current debts by<br />
taking out a new loan.<br />
Sometimes the solution includes some of each of these tactics.<br />
Page 27 of 147
Process<br />
The bulk of the consumer debt, especially that with a high interest, is repaid by a new<br />
loan. Most debt consolidation loans are offered from lending institutions and secured as<br />
a second mortgage or home equity line of credit. These require the individual to put up a<br />
home as collateral and the loan to be less than the equity available.<br />
The overall lower interest rate is an advantage of the debt consolidation loan offers<br />
consumers. Lenders have fixed costs to process payments and repayment can spread<br />
out over a larger period. However, such consolidation loans have costs: fees, interest,<br />
and "points" where one point equals to one percent of the amount borrowed. In some<br />
countries, these loans may provide certain tax advantages. Because they are secured,<br />
a lender can attempt to seize property if the borrower goes into default.<br />
Personal loans comprise another form of debt consolidation loan. Individuals can issue<br />
debtors a personal loan that satisfies the outstanding debt and creates a new one on<br />
their own terms. These loans, often unsecured, are based on the personal relationship<br />
rather than collateral.<br />
Student Loan Consolidation<br />
In the United States, federal student loans are consolidated somewhat differently from<br />
in the UK, as federal student loans are guaranteed by the U.S. government.<br />
United States<br />
In a federal student loan consolidation, existing loans are purchased by the Department<br />
of Education. Upon consolidation, a fixed interest rate is set based on the then-current<br />
interest rate. Reconsolidating does not change that rate. If the student combines loans<br />
of different types and rates into one new consolidation loan, a weighted average<br />
calculation will establish the appropriate rate based on the then-current interest rates of<br />
the different loans being consolidated together.<br />
Federal student loan consolidation is often referred to as refinancing, which is incorrect<br />
because the loan rates are not changed, merely locked in. Unlike private sector debt<br />
consolidation, student loan consolidation does not incur any fees for the borrower;<br />
private companies make money on student loan consolidation by reaping subsidies<br />
from the federal government.<br />
United Kingdom<br />
In the UK student loan entitlements are guaranteed, and are recovered using a meanstested<br />
system from the student's future income. Student loans in the UK can not be<br />
included in bankruptcy, but do not affect a person's credit rating because the<br />
repayments are deducted from salary at source by employers, similar to Income<br />
Page 28 of 147
Tax and National Insurance contributions. Many students, however, struggle with<br />
commercial debt well after their courses have finished.<br />
Australia<br />
Australia’s student loan system once had 35 years to pay back loans, but it’s currently<br />
15. Those seriously delinquent on student loans face arrest at the border.<br />
Japan<br />
In Japan, an increasing number of student loans are in arrears. This has caused the<br />
Asian nation to take harsher steps when it comes to lending determinations. In an effort<br />
to prevent future defaults, Japan has begun associating loan approvals to academic<br />
performance.<br />
Page 29 of 147
Page 30 of 147
III. <strong>Debt</strong> Restructuring<br />
<strong>Debt</strong> Restructuring is a process that allows a private or public company, or a<br />
sovereign entity facing cash flow problems and financial distress to reduce and<br />
renegotiate its delinquent debts to improve or restore liquidity so that it can continue its<br />
operations.<br />
Replacement of old debt by new debt when not under financial distress is called<br />
"refinancing". Out-of-court restructurings, also known as workouts, are increasingly<br />
becoming a global reality.<br />
Motivation<br />
A debt restructuring, which involves a reduction of debt and an extension of payment<br />
terms, is usually a less expensive alternative to bankruptcy. The main costs associated<br />
with debt restructuring are the time and effort negotiating with bankers, creditors,<br />
vendors, and tax authorities.<br />
Page 31 of 147
In the United States, small business bankruptcy filings cost at least $50,000 in legal and<br />
court fees, and filing costs in excess of $100,000 are common. By some measures, only<br />
20% of firms survive Chapter 11 bankruptcy filings. [2]<br />
Historically, debt restructuring has been the province of large corporations with financial<br />
wherewithal. In the Great Recession that began with the financial crisis of 2007–08, a<br />
component of debt restructuring called debt mediation emerged for small businesses<br />
(with revenues under $5 million). Like debt restructuring, debt mediation is a businessto-business<br />
activity and should not be considered the same as individual debt reduction<br />
involving credit cards, unpaid taxes, and defaulted mortgages.<br />
In 2010 debt mediation has become a primary way for small businesses to refinance in<br />
light of reduced lines of credit and direct borrowing. <strong>Debt</strong> mediation can be costeffective<br />
for small businesses, help end or avoid litigation, and is preferable to filing for<br />
bankruptcy. While there are numerous companies providing restructuring for large<br />
corporations, there are few legitimate firms working for small businesses. Legitimate<br />
debt restructuring firms only work for the debtor client (not as a debt collection agency)<br />
and should charge fees based on success.<br />
Among the debt situations that can be worked out in business-to-business debt<br />
mediation are: lawsuits and judgments, delinquent property, machinery, equipment<br />
rentals/leases, business loans or mortgage on business property, capital payments due<br />
for improvements/construction, invoices and statements, disputed bills and problem<br />
debts.<br />
<strong>Debt</strong>-for-Equity Swap<br />
Methods<br />
In a debt-for-equity swap, a company's creditors generally agree to cancel some or all of<br />
the debt in exchange for equity in the company.<br />
<strong>Debt</strong> for equity deals often occur when large companies run into serious financial<br />
trouble, and often result in these companies being taken over by their principal<br />
creditors. This is because both the debt and the remaining assets in these companies<br />
are so large that there is no advantage for the creditors to drive the company into<br />
bankruptcy. Instead the creditors prefer to take control of the business as a going<br />
concern. As a consequence, the original shareholders' stake in the company is<br />
generally significantly diluted in these deals and may be entirely eliminated, as is typical<br />
in a Chapter 11 bankruptcy.<br />
<strong>Debt</strong>-for-equity swaps are one way of dealing with sub-prime mortgages. A householder<br />
unable to service his debt on a $180,000 mortgage for example, may by agreement with<br />
his bank have the value of the mortgage reduced (say to $135,000 or 75% of the<br />
house's current value), in return for which the bank will receive 50% of the amount by<br />
which any resale value, when the house is resold, exceeds $135,000.<br />
Page 32 of 147
Bondholder Haircuts<br />
A debt-for-equity swap may also be called a "bondholder haircut". Bondholder haircuts<br />
at large banks were advocated as a potential solution for the subprime mortgage<br />
crisis by prominent economists:<br />
Economist Joseph Stiglitz testified that bank bailouts "are really bailouts not of the<br />
enterprises but of the shareholders and especially bondholders. There is no reason that<br />
American taxpayers should be doing this". He wrote that reducing bank debt levels by<br />
converting debt into equity will increase confidence in the financial system. He believes<br />
that addressing bank solvency in this way would help address credit market liquidity<br />
issues.<br />
Economist Jeffrey Sachs has also argued in favor of such haircuts: "The cheaper and<br />
more equitable way would be to make shareholders and bank bondholders take the hit<br />
rather than the taxpayer. The Fed and other bank regulators would insist that bad loans<br />
be written down on the books. Bondholders would take haircuts, but these losses are<br />
already priced into deeply discounted bond prices."<br />
If the key issue is bank solvency, converting debt to equity via<br />
bondholder haircuts presents an elegant solution to the problem. Not only is debt<br />
reduced along with interest payments, but equity is simultaneously increased. Investors<br />
can then have more confidence that the bank (and financial system more broadly) is<br />
solvent, helping unfreeze credit markets. Taxpayers do not have to contribute dollars<br />
and the government may be able to just provide guarantees in the short term to buttress<br />
Page 33 of 147
confidence in the recapitalized institution. For example, Wells Fargo owed its<br />
bondholders $267 billion, according to its 2008 annual report. A 20% haircut would<br />
reduce this debt by about $54 billion, creating an equal amount of equity in the process,<br />
thereby recapitalizing the bank significantly.<br />
Informal <strong>Debt</strong> Repayment Agreements<br />
Most defendants who cannot pay the enforcement officer in full at once enter into<br />
negotiations with the officer to pay by installments. This process is informal but cheaper<br />
and quicker than an application to the court.<br />
Payment by this method relies on the cooperation of the creditor and the enforcement<br />
officer. It is therefore important not to offer more than you can afford or to fall behind<br />
with the payments you agree. If you do fall behind with the payments and the<br />
enforcement officer has seized goods, they may remove them to the sale room for<br />
auction.<br />
Switzerland<br />
In Various Jurisdictions<br />
Under Swiss law, debt restructuring may occur out of court, or through a court-mediated<br />
debt restructuring agreement that may provide for a partial waiver of debts, or for a<br />
liquidation of the debtor's assets by the creditors.<br />
United Kingdom<br />
The majority of debt restructuring within the United Kingdom is undertaken on a<br />
collaborative basis between the borrower and the creditors. Should this be<br />
unsatisfactory in the first instance, the court may be asked to mediate and appoint<br />
administrators.<br />
Italy<br />
<strong>Debt</strong> restructuring within Italy may occur either out of court (ex article 67 of the Italian<br />
Bankruptcy Law) when a waiver or simple debt rescheduling is required, or through a<br />
court-mediated debt restructuring agreement (ex article 182/bis of the Italian Bankruptcy<br />
Law) and may provide for a partial waiver of debts, mandatory recapitalization of the<br />
debtor, or for a liquidation of certain debtor's assets to repay privileged creditors.<br />
Germany<br />
While being famous for its efficiency in other matter, this is not true for debt<br />
restructuring. Many German companies prefer to restructure their debts using the<br />
English scheme of arrangement proceedings because they believe that the German<br />
Page 34 of 147
estructuring law is not very helpful. The main reason for this is that binding a dissenting<br />
minority is only possible under formal insolvency proceedings in Germany.<br />
Corporate Restructuring<br />
As the incidence of corporate failures has increased in part due to current economic<br />
climate, so a more "standard" approach to restructuring has developed. Although every<br />
case has unique characteristics, the process of restructuring follows a number of<br />
important phases. Initially, a downturn in trading performance is identified typically<br />
through management accounts or as a result of revised management projections. This<br />
triggers a gathering of lenders and other stakeholders, in anticipation of a breach<br />
of financial covenants or a crisis of liquidity.<br />
The lending group (typically comprising corporate finance divisions of banks) will<br />
normally commission a corporate advisory group to review the business and its financial<br />
position. This will form the basis of any restructuring of facilities. The lending group will<br />
typically appoint a Corporate Restructuring Officer (CRO) to assist management in the<br />
Page 35 of 147
turnaround of the business, and embracing the recommendations presented by the<br />
banking group and the corporate advisory report.<br />
Page 36 of 147
IV. <strong>Debt</strong> Management Planning<br />
A <strong>Debt</strong> Management Plan (DMP) is a formal agreement between a debtor and<br />
a creditor that addresses the terms of an outstanding debt. [1] This commonly refers to a<br />
personal finance process of individuals addressing high consumer debt. <strong>Debt</strong><br />
management plans help reduce outstanding, unsecured debts over time to help the<br />
debtor regain control of finances. The process can secure a lower overall interest rate,<br />
longer repayment terms, or an overall reduction in the debt itself.<br />
Overview<br />
DMPs for consumers are often negotiated by a credit counseling agency on behalf of<br />
the debtor. Credit counseling agencies often address the debt by working with the<br />
debtor to set a budget based on their regular income and expenditures that will then<br />
include one regular bill payment that is allocated across the creditor(s). Agencies will<br />
negotiate on behalf of the debtor to lower payments and interest rates with creditors.<br />
Some of the agencies are non-profits that charge no or non-fee rates, while others can<br />
be for-profit and include high fees.<br />
The effect on the debtor's overall credit score will vary. In the United Kingdom, as well<br />
as DMPs, residents can also apply for an Individual voluntary arrangement (IVAs),<br />
which can give the debtor a discount on their debt.<br />
Page 37 of 147
Regulations<br />
United States<br />
In the United States, credit counseling agencies are loosely regulated by the Federal<br />
Trade Commission (FTC), the nation's consumer protection agency, which<br />
can sue companies that have deceived consumers about the cost, nature, or benefits of<br />
their services. Different states may regulate DMPs individually and attorneys<br />
general are empowered to protect state citizens from fraud.<br />
United Kingdom<br />
In the United Kingdom, the Financial Conduct Authority is responsible for the regulation<br />
of consumer credit and has established a <strong>Debt</strong> Management Plan Protocol. It can<br />
impose fines for improper conduct.<br />
European Union<br />
Elsewhere in the European Union, regulation and non-regulation of credit counseling<br />
agencies and their approaches, including DMPs, are widely varied. In Sweden,<br />
guidelines for credit counseling are loosely provided by the Swedish Confederation of<br />
Professional Employees (TCO) and creditors are encouraged to use them in lieu of the<br />
court system. In Ireland, the Irish Congress of Trade Unions (ICTU) provides debt<br />
resolution information directly to debtors. In Latvia, a debt advisory company called<br />
LAKRA works with employers to assist indebted employees.<br />
Page 38 of 147
V. <strong>Debt</strong>-Snowball Method<br />
The <strong>Debt</strong>-Snowball Method is a debt reduction strategy, whereby one who owes<br />
on more than one account pays off the accounts starting with the<br />
smallest balances first, while paying the minimum payment on larger debts. Once the<br />
smallest debt is paid off, one proceeds to the next slightly larger small debt above that,<br />
so on and so forth, gradually proceeding to the larger ones later. This method is<br />
sometimes contrasted with the debt stacking method, also called the "debt avalanche<br />
method", where one pays off accounts on the highest interest rate first.<br />
The debt-snowball method is most often<br />
applied to repaying revolving credit —<br />
such as credit cards. Under the method,<br />
extra cash is dedicated to paying debts<br />
with the smallest amount owed.<br />
e - $26/month minimum<br />
Car payment - $2500 balance -<br />
$150/month minimum<br />
Loan - $5000 balance -<br />
$200/month minimum<br />
The person has an additional<br />
$100/month which can be devoted<br />
to repayment of debt.<br />
First two months - under the debtsnowball<br />
method, payments would be<br />
made to the creditors as follows:<br />
<br />
<br />
<br />
Credit Card B - $26/month minimum<br />
Car payment - $150/month minimum<br />
Loan - $200/month minimum<br />
<br />
Credit Card A - $125 ($25/month<br />
minimum + $100 additional<br />
available)<br />
Third month balance (presuming the person has not added to the balances, which<br />
would defeat the purpose of debt reduction) - Credit Card A would have been paid in<br />
full, and the remaining balances as follows:<br />
Credit Card B - $448<br />
Car payment - $2200<br />
Loan - $4600<br />
Page 39 of 147
Third month payments - the person would then take the $125 previously used to pay off<br />
Credit Card A and apply it as additional payment to the Credit Card B balance, which<br />
would make payments for the next three months as follows:<br />
<br />
<br />
<br />
Credit Card B - $151 ($26/month minimum + $125 additional available)<br />
Car Payment - $150/month minimum<br />
Loan - $200/month minimum<br />
Three more months (six total) - Credit Card B would be paid in full (the final payment<br />
would be $146), and the remaining balances would be as follows:<br />
Car Payment - $1750<br />
Loan - $4000<br />
Then the person would take the $151 previously used to pay off Credit Cards A & B and<br />
apply it as additional payment to the car loan balance, which would make payments as<br />
follows:<br />
<br />
<br />
Car Payment - $301 ($150/month minimum + $151 additional available)<br />
Loan - $200/month minimum<br />
It would take six months to pay the car loan (the final payment being $240), whereupon<br />
the person would then make payments of $501/month toward the loan (which would<br />
have a $2800 balance) for six months (with the last payment at $234).<br />
Thus in 17 months the person has repaid four loans, with two of them being paid in a<br />
mere five months and three within one year.<br />
Benefits<br />
The primary benefit of the smallest-balance plan is the psychological benefit of seeing<br />
results sooner, in that the debtor sees reductions in both the number of creditors owed<br />
(and, thus, the number of bills received) and the amounts owed to each creditor.<br />
Retirement contributions should start once your expected investment yield is higher<br />
than the next highest debt interest rate (generally 8% for a balanced portfolio).<br />
In a 2012 study by Northwestern’s Kellogg School of Management, researchers found<br />
that “consumers who tackle small balances first are likelier to eliminate their overall<br />
debt” than trying to pay off high interest rate balances first.<br />
A 2016 study in Harvard Business Review came to a similar conclusion.<br />
Page 40 of 147
Criticism<br />
It’s expensive. If you’re not the “hug yourself” type, and you’re not a fan of brain fakes,<br />
then the <strong>Debt</strong> Snowball method just costs you more money. By ignoring a $1,200 debt<br />
at 17% interest and focusing, instead, on paying off a $50 debt at 5% interest, you<br />
continue racking up interest charges on that $1,200 debt. And at 17% it racks up mighty<br />
fast.<br />
It’s slow. It’s a fixed strategy that underestimates your ability to boost your income and<br />
leverage good debt to accelerate your debt payoff timeline.<br />
— Andy Proper, "The Fastest Way To Get Out of (Bad) <strong>Debt</strong>, Get Into (Good)<br />
<strong>Debt</strong>, and Start Building Real Wealth", WealthFit (11/08/2018)<br />
People with more financial discipline can get ahead more quickly by paying off the credit<br />
cards and loans with the higher interest rates first. This will minimize costs to become<br />
debt-free faster than the smallest-balance approach.<br />
Dave Ramsey, a proponent of the debt-snowball method, concedes that an analysis of<br />
math and interest leans toward paying the highest interest debt first; however, based on<br />
his experience, Ramsey states that personal finance is "20 percent head knowledge<br />
Page 41 of 147
and 80 percent behavior" and that people trying to reduce debt need "quick wins" (i.e.,<br />
paying off the smallest debt) in order to remain motivated toward debt reduction.<br />
Research<br />
Decision-making research has revealed that the debt-snowball method is a very<br />
common approach to managing multiple debts, even when larger debts have larger<br />
interest rates. Amar, Ariely, Ayal, Cryder, and Rick (2011) observed this tendency in<br />
surveys of indebted consumers and in incentive-compatible experiments. Amar et al.<br />
(2011) found that people naturally use the snowball method, by paying off small debts<br />
first, and this reflects negatively on their financial outcomes since they keep on paying<br />
off debts in an inefficient way. Moreover, Amar et al. (2011) found that restricting<br />
participants’ ability to completely pay off small debts actually helped them to reduce<br />
overall debt more quickly, by refocusing their attention on paying off high-interest debts.<br />
The natural tendency to pay off small debts first (which Amar et al. termed "debt<br />
account aversion") has been attributed to the appeal of achieving goals that are near<br />
completion and the tendency for multiple losses (e.g., debts) to be more distressing<br />
than a single loss of equivalent total value.<br />
Page 42 of 147
VI. International <strong>Debt</strong> <strong>Relief</strong><br />
<strong>Debt</strong> <strong>Relief</strong> Under the Heavily Indebted<br />
Poor Countries (HIPC) Initiative<br />
March 8, 2018<br />
The joint IMF–World Bank comprehensive approach to debt reduction is designed to<br />
ensure that no poor country faces a debt burden it cannot manage. To date, debt<br />
reduction packages under the HIPC Initiative have been approved for 36 countries, 30<br />
of them in Africa, providing $76 billion in debt-service relief over time. Three additional<br />
countries are eligible for HIPC Initiative assistance.<br />
<strong>Debt</strong> <strong>Relief</strong> Key to Poverty <strong>Reduction</strong><br />
The HIPC Initiative was launched in 1996 by the IMF and World Bank, with the aim of<br />
ensuring that no poor country faces a debt burden it cannot manage. Since then, the<br />
international financial community, including multilateral organizations and governments,<br />
have worked together to reduce to sustainable levels the external debt burdens of the<br />
most heavily indebted poor countries.<br />
Page 43 of 147
In 1999, a comprehensive review of the Initiative allowed the Fund to provide faster,<br />
deeper, and broader debt relief and strengthened the links between debt relief, poverty<br />
reduction, and social policies.<br />
In 2005, to help accelerate progress toward the United Nations Millennium Development<br />
Goals (MDGs), the HIPC Initiative was supplemented by theMultilateral <strong>Debt</strong> <strong>Relief</strong><br />
Initiative (MDRI) . The MDRI allows for 100 percent relief on eligible debts by three<br />
multilateral institutions—the IMF, the World Bank, and the African Development Fund<br />
(AfDF)—for countries completing the HIPC Initiative process. In 2007, the Inter-<br />
American Development Bank (IaDB) also decided to provide additional (“beyond HIPC”)<br />
debt relief to the five HIPCs in the Western Hemisphere.<br />
Two-Step Process<br />
Countries must meet certain criteria, commit to poverty reduction through policy<br />
changes, and demonstrate a good track record over time. The Fund and Bank provide<br />
interim debt relief in the initial stage and, when a country meets its commitments, full<br />
debt relief is provided.<br />
First Step: Decision Point. To be considered for HIPC Initiative assistance, a country<br />
must fulfill the following four conditions:<br />
1) Be eligible to borrow from the World Bank’s International Development<br />
Agency, which provides interest-free loans and grants to the world’s poorest<br />
countries, and from the IMF’s Poverty <strong>Reduction</strong> and Growth Trust, which<br />
provides loans to low-income countries at subsidized rates;<br />
2) Face an unsustainable debt burden that cannot be addressed through<br />
traditional debt relief mechanisms;<br />
3) Have established a track record of reform and sound policies through IMFand<br />
World Bank–supported programs ; and<br />
4) Have developed a Poverty <strong>Reduction</strong> Strategy Paper (PRSP) through a broadbased<br />
participatory process in the country.<br />
Once a country has met or made sufficient progress in meeting these four criteria, the<br />
Executive Boards of the IMF and World Bank formally decide on its eligibility for debt<br />
relief, and the international community commits to reducing debt to a level that is<br />
considered sustainable. This first stage under the HIPC Initiative is referred to as the<br />
decision point. Once a country reaches its decision point, it may immediately begin<br />
receiving interim relief on its debt service falling due.<br />
Second Step: Completion Point. In order to receive full and irrevocable reduction in<br />
debt available under the HIPC Initiative, a country must:<br />
Page 44 of 147
1) Establish a further track record of good performance under programs<br />
supported by loans from the IMF and the World Bank;<br />
2) Implement satisfactorily key reforms agreed at the decision point; and<br />
3) Adopt and implement its PRSP for at least one year.<br />
Once a country has met these criteria, it can reach its completion point, which allows it<br />
to receive the full debt relief committed at the decision point.<br />
Countries Receiving <strong>Debt</strong> <strong>Relief</strong>. Of the 39 countries eligible or potentially eligible for<br />
HIPC Initiative assistance, 36 are receiving full debt relief from the IMF and other<br />
creditors after reaching their completion points. Three countries, which have been<br />
identified as potentially eligible for HIPC Initiative assistance, have not yet reached their<br />
decision points.<br />
Page 45 of 147
<strong>Debt</strong> <strong>Relief</strong> Frees-Up Resources for Social Spending<br />
<strong>Debt</strong> relief is one part of a much larger effort, which also includes aid flows, to address<br />
the development needs of low-income countries and make sure that debt sustainability<br />
is maintained over time. For debt reduction to have a tangible impact on poverty, the<br />
additional money needs to be spent on programs that benefit the poor.<br />
Boosting Social Spending. Before the HIPC Initiative, eligible countries were, on<br />
average, spending slightly more on debt service than on health and education<br />
combined. Now, they have increased markedly their expenditures on health, education,<br />
and other social services. On average, such spending is about five times the amount of<br />
debt-service payments.<br />
Reducing <strong>Debt</strong> Service. For the 36 countries receiving debt relief, debt service paid<br />
has declined by about 1.5 percentage points of GDP between 2001 and 2015.<br />
Improving Public <strong>Debt</strong> Management. <strong>Debt</strong> relief has markedly improved the debt<br />
position of post–completion point countries, bringing their debt indicators down below<br />
those of other HIPCs or non-HIPCs. However, many remain vulnerable to shocks,<br />
particularly those affecting exports, as seen during the global economic crisis. To<br />
reduce their debt vulnerabilities decisively, countries need to pursue cautious borrowing<br />
policies and strengthen their public debt management.<br />
IMF debt relief complemented by other sources<br />
About 44 percent of the funding comes from the IMF and other multilateral institutions,<br />
and the remaining amount comes from bilateral creditors.<br />
The total cost of providing assistance to the 39 countries that have been found eligible<br />
or potentially eligible for debt relief under the enhanced HIPC Initiative is estimated to<br />
be about $77 billion in end-2015 net present value terms.<br />
The IMF’s share of the cost is financed by bilateral contributions and resources from the<br />
Fund itself, mainly investment income on the proceeds from off-market gold sales<br />
in 1999. These funds were deposited to the IMF’s PRG-HIPC Trust.<br />
Resources available in the trust are currently insufficient to finance the cost of debt relief<br />
to all countries that meet the initial conditions for debt relief and reach the decision<br />
point. The original financing plan did not include the cost of debt relief to Sudan and<br />
Somalia, as well as to other countries that entered the Initiative after 2006. Should these<br />
countries progress to the decision point, there would be an urgent need to mobilize<br />
resources.<br />
Challenges Remain<br />
The pre-decision point countries face common challenges, including preservingpeace<br />
and stability, and improving governance and the delivery of basic services. Addressing<br />
Page 46 of 147
these challenges will require continued efforts from these countries to strengthen<br />
policies and institutions, and support from the international community.<br />
Another challenge is to ensure that eligible countries get full debt relief from all their<br />
creditors. Although the largest creditors (the World Bank, the African Development<br />
Bank, the IMF, the Inter-American Development Bank, and all Paris Club creditors)<br />
have provided their full share of debt relief under the HIPC Initiative, and even beyond,<br />
others are lagging behind. Smaller plurilateral institutions, non-Paris Club official<br />
bilateral creditors, and commercial creditors, which together account for about<br />
27 percent of total HIPC Initiative costs, have only delivered a small share of their<br />
expected relief so far.<br />
Non–Paris Club bilateral creditors as a whole have delivered around 47 percent of their<br />
share of HIPC Initiative debt relief, but about one third of these creditors have not<br />
delivered any relief at all. While there has been some increase in the delivery over the<br />
past few years, the rate of delivery remains disappointingly low.<br />
The delivery of debt relief by commercial creditors has increased markedly in recent<br />
years through a few large operations supported by IDA’s <strong>Debt</strong> <strong>Reduction</strong> Facility<br />
Page 47 of 147
uyback operations. Some commercial creditors have initiated litigations against HIPCs,<br />
raising significant legal challenges to burden sharing among all creditors, including the<br />
multilateral institutions. The number of litigation cases against HIPCs has been<br />
declining in recent years but flattened over the past few years.<br />
Given the voluntary nature of creditor participation in the HIPC Initiative, the IMF and<br />
the World Bank will continue to use moral suasion to encourage creditors to participate<br />
in the Initiative and to deliver fully their share of HIPC Initiative debt relief.<br />
The IMF and World Bank will also continue to improve their ability to monitor the<br />
delivery of HIPC Initiative debt relief. The IMF will continue to address issues related to<br />
participation in the HIPC Initiative during its regular consultations and other missions to<br />
creditor countries.<br />
List of Countries That Have Qualified for, are Eligible or Potentially Eligible, and<br />
May Wish to Receive HIPC Initiative Assistance (as of October 2017)<br />
Post-Completion-Point Countries (36)<br />
Afghanistan Ethiopia Mauritania<br />
Benin The Gambia Mozambique<br />
Bolivia Ghana Nicaragua<br />
Burkina Faso Guinea Niger<br />
Burundi<br />
Guinea-Bissau Rwanda<br />
Cameroon Guyana São Tomé & Príncipe<br />
Central African Republic Haiti Senegal<br />
Chad Honduras Sierra Leone<br />
Comoros Liberia Tanzania<br />
Republic of Congo Madagascar Togo<br />
Democratic Republic of Congo Malawi Uganda<br />
Côte d’Ivoire Mali Zambia<br />
Pre-Decision-Point Countries (3)<br />
Eritrea Somalia Sudan<br />
Page 48 of 147
VII. <strong>Debt</strong> <strong>Relief</strong> Countries<br />
The Heavily Indebted Poor Countries (HIPC) are a group of 37 developing<br />
countries with high levels of poverty and debt overhang which are eligible for special<br />
assistance from the International Monetary Fund(IMF) and the World Bank.<br />
HIPC Initiative<br />
The HIPC Initiative was initiated by the International Monetary Fund and the World Bank<br />
in 1996, following extensive lobbying by NGOs and other bodies. It provides debt<br />
relief and low-interest loans to cancel or reduce external debt repayments to sustainable<br />
levels, meaning they can repay debts in a timely fashion in the future. To be considered<br />
for the initiative, countries must face an unsustainable debt burden which cannot be<br />
managed with traditional means. Assistance is conditional on the national governments<br />
of these countries meeting a range of economic management and performance targets<br />
and undertaking economic and social reforms.<br />
As of January 2012, the HIPC Initiative had identified 39 countries (33 of which are in<br />
Sub-Saharan Africa) as being potentially eligible to receive debt relief. The 36 countries<br />
that have so far received full or partial debt relief are: Tanzania Is now not part of the<br />
HIPC.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Afghanistan<br />
Benin<br />
Bolivia<br />
Burkina Faso<br />
Burundi<br />
Cameroon<br />
Central African Republic<br />
Chad<br />
Republic of the Congo<br />
Democratic Republic of the Congo<br />
Comoros<br />
Ivory Coast<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Ethiopia<br />
Gambia<br />
Ghana<br />
Guinea<br />
Guinea-Bissau<br />
Guyana<br />
Haiti<br />
Honduras<br />
Liberia<br />
Madagascar<br />
Mali<br />
Mauritania<br />
36 countries have completed the program and had their external debt cancelled in full,<br />
after Chad passed the Completion Point in 2015.<br />
An additional three countries (Eritrea, Somalia and Sudan) are being considered for<br />
entry into the program.<br />
To receive debt relief under HIPC, a country must first meet HIPC's threshold<br />
requirements. At HIPC's inception in 1996, the primary threshold requirement was that<br />
the country's debt remains at unsustainable levels despite full application of traditional,<br />
bilateral debt relief. At the time, HIPC considered debt unsustainable when the ratio of<br />
Page 49 of 147
debt-to-exports exceeded 200-250% or when the ratio of debt-to-government revenues<br />
exceeded 280%.<br />
Funding<br />
The IMF estimates that the total cost of providing debt relief to the 40 countries currently<br />
eligible for the HIPC program would be around $71 billion (in 2007 dollars). Half of the<br />
funding is provided by the IMF, World Bank, and other multilateral organizations, while<br />
the other half is provided by the creditor countries. The IMF's share of the cost is<br />
currently being funded by the proceeds of gold sales by the organization in 1999, but it<br />
estimated that this will not be enough to cover the full cost, and further funding will need<br />
to be raised if additional countries such as Sudan and Somalia meet the qualification<br />
requirements for entry into the program.<br />
Criticism<br />
Critics soon began to attack HIPC's scope and its structure. First, they criticized HIPC's<br />
definition of debt sustainability, arguing that the debt-to-export and debt-to-governmentrevenues<br />
criteria were arbitrary and too restrictive. As evidence, critics highlighted that,<br />
by 1999, only four countries had received any debt relief under HIPC. Second, the sixyear<br />
program was too long and too inflexible to meet the individual needs of debtor<br />
nations. Third, the IMF and the World Bank did not cancel any debt until the completion<br />
point, leaving countries under the burden of their debt payments while they struggled to<br />
institute structural reforms. Fourth, the ESAF conditions often undermined povertyreduction<br />
efforts. For example, privatization of utilities tended to raise the cost of<br />
services beyond the citizens' ability to pay. Finally, critics attacked HIPC as a program<br />
designed by creditors to protect creditor interests, leaving countries with unsustainable<br />
debt burdens even upon reaching the decision point.<br />
Inadequate debt relief for such countries means that they will need to spend more on<br />
servicing debts, rather than on actively investing in programs that can reduce poverty.<br />
Response to The Criticism<br />
HIPC addressed its shortcomings by expanding its definition of unsustainable debts,<br />
making greater relief available to more countries, and by making relief available sooner.<br />
Since 1996, the IMF has modified HIPC in several ways, often in response to the<br />
shortcomings its critics have highlighted. The IMF first restructured HIPC in 1999. These<br />
revisions modified HIPC's threshold requirements. Today, HIPC defines three minimum<br />
requirements for participation in the program. First, as before, a country must show its<br />
debt is unsustainable; however, the targets for determining sustainability decreased to a<br />
debt-to-export ratio of 150% and a debt-to-government-revenues ratio of 250%.<br />
Second, the country must be sufficiently poor to qualify for loans from the World Bank's<br />
International Development Association or the IMF's Poverty <strong>Reduction</strong> and Growth<br />
Facility (PRGF, the successor to ESAF), which provide long-term, interest-free loans to<br />
Page 50 of 147
the world's poorest nations. Lastly, the country must establish a track record of reforms<br />
to help prevent future debt crises.<br />
In addition to the modified threshold requirements, the 1999 revisions introduced<br />
several other changes. First, the six-year structure was abandoned and replaced by a<br />
"floating completion point" that allows countries to progress towards completion in less<br />
than six years. Second, the revised HIPC allows for interim debt relief so that countries<br />
begin to see partial relief before reaching the completion point. Third, the PRGF heavily<br />
modified ESAF by curtailing the number and detail of IMF conditions and by<br />
encouraging greater input from the local community into the program's design.<br />
One of PRGF's goals is to ensure that impoverished nations re-channel the government<br />
funds freed from debt repayment into poverty-reduction programs. To that end, each<br />
country's PRGF program is modeled around a Poverty <strong>Reduction</strong> Strategy Paper<br />
(PRSP). PRSPs describe the macroeconomic, structural, and social programs that a<br />
country will follow to promote economic growth and reduce poverty. A broad range of<br />
government, NGO, and civil-society groups must participate in the development of the<br />
PRSP to ensure the plan has local support. Under the revised HIPC, a country reaches<br />
Page 51 of 147
the decision point once it has demonstrated progress in following its PRSP. The country<br />
then reaches its completion point once it has implemented and followed its PRSP for at<br />
least one year and has demonstrated macroeconomic stability.<br />
In 2001, the IMF introduced another tool to increase HIPC's effectiveness. Under the<br />
new practice of "topping up," countries that unexpectedly suffer economic setbacks after<br />
the decision point due to external factors, such as rising interest rates or falling<br />
commodity prices, are eligible for increased debt forgiveness above the decision-point<br />
level.<br />
Further progress towards debt relief was announced on December 21, 2005, when the<br />
IMF granted preliminary approval to an initial debt relief measure of US $3.3 billion for<br />
19 of the world's poorest countries, with the World Bank expected to write off the larger<br />
debts owed to it by 17 HIPCs in mid-2006."<br />
As of December 2006, twenty-one countries have reached the HIPC completion point.<br />
Nine additional countries have passed the decision point and are working toward<br />
completion. Ten other countries carry unsustainable debts according to HIPC<br />
standards, but they have yet to reach the decision point. So far, the IMF and World<br />
Bank have approved $35 billion of HIPC debt relief. Five countries have received an<br />
additional $1.6 billion in "topping up" assistance since 2001.<br />
Page 52 of 147
VIII. References<br />
1. https://www.investopedia.com/terms/d/debt-relief.asp<br />
2. https://en.wikipedia.org/wiki/<strong>Debt</strong>_relief<br />
3. https://en.wikipedia.org/wiki/<strong>Debt</strong>_consolidation<br />
4. https://en.wikipedia.org/wiki/<strong>Debt</strong>_restructuring<br />
5. https://en.wikipedia.org/wiki/<strong>Debt</strong>_management_plan<br />
6. https://en.wikipedia.org/wiki/<strong>Debt</strong>-snowball_method<br />
7. https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/11/<strong>Debt</strong>-<strong>Relief</strong>-Underthe-Heavily-Indebted-Poor-Countries-Initiative<br />
8. https://en.wikipedia.org/wiki/Heavily_indebted_poor_countries<br />
9. https://www.slcolibrary.org/smartInvesting/pdfs/Week4-<br />
Repaying_<strong>Debt</strong>s_withvisionboard.pdf<br />
10. https://cdn.ramseysolutions.net/media/pdf/forms/debt-snowball-2017.pdf<br />
11.<br />
https://www.everycrsreport.com/files/20061206_RL33376_b464ae5b41860601066c9c37<br />
da2e255bd9a3134a.pdf<br />
Page 53 of 147
Notes<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
Page 54 of 147
Notes<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
_____________________________________________________________________________________<br />
Page 55 of 147
Page 56 of 147
Attachment A<br />
Strategies for Paying-Off <strong>Debt</strong><br />
Page 57 of 147
Page 58 of 147
Page 59 of 147
Page 60 of 147
Page 61 of 147
Page 62 of 147
Page 63 of 147
Page 64 of 147
Page 65 of 147
Page 66 of 147
Page 67 of 147
Page 68 of 147
Page 69 of 147
Page 70 of 147
Page 71 of 147
Page 72 of 147
Page 73 of 147
Page 74 of 147
Page 75 of 147
Page 76 of 147
Page 77 of 147
Page 78 of 147
Page 79 of 147
Page 80 of 147
Page 81 of 147
Page 82 of 147
Page 83 of 147
Page 84 of 147
Page 85 of 147
Page 86 of 147
Page 87 of 147
Page 88 of 147
Page 89 of 147
Page 90 of 147
Page 91 of 147
Page 92 of 147
Page 93 of 147
Page 94 of 147
Page 95 of 147
Page 96 of 147
Attachment B<br />
<strong>Debt</strong>-Snowball Strategy<br />
Page 97 of 147
Page 98 of 147
Page 99 of 147
Page 100 of 147
Attachment C<br />
Iraq’s <strong>Debt</strong> <strong>Relief</strong>:<br />
Implications for International <strong>Debt</strong> <strong>Relief</strong><br />
Page 101 of 147
Page 102 of 147
Page 103 of 147
Page 104 of 147
Page 105 of 147
Page 106 of 147
Page 107 of 147
Page 108 of 147
Page 109 of 147
Page 110 of 147
Page 111 of 147
Page 112 of 147
Page 113 of 147
Page 114 of 147
Page 115 of 147
Page 116 of 147
Page 117 of 147
Page 118 of 147
Page 119 of 147
Page 120 of 147
Page 121 of 147
Page 122 of 147
Advocacy Foundation Publishers<br />
Page 123 of 147
Advocacy Foundation Publishers<br />
The e-Advocate Quarterly<br />
Page 124 of 147
Issue Title Quarterly<br />
Vol. I 2015 The Fundamentals<br />
I<br />
The ComeUnity ReEngineering<br />
Project Initiative<br />
Q-1 2015<br />
II The Adolescent Law Group Q-2 2015<br />
III<br />
Landmark Cases in US<br />
Juvenile Justice (PA)<br />
Q-3 2015<br />
IV The First Amendment Project Q-4 2015<br />
Vol. II 2016 Strategic Development<br />
V The Fourth Amendment Project Q-1 2016<br />
VI<br />
Landmark Cases in US<br />
Juvenile Justice (NJ)<br />
Q-2 2016<br />
VII Youth Court Q-3 2016<br />
VIII<br />
The Economic Consequences of Legal<br />
Decision-Making<br />
Q-4 2016<br />
Vol. III 2017 Sustainability<br />
IX The Sixth Amendment Project Q-1 2017<br />
X<br />
The Theological Foundations of<br />
US Law & Government<br />
Q-2 2017<br />
XI The Eighth Amendment Project Q-3 2017<br />
XII<br />
The EB-5 Investor<br />
Immigration Project*<br />
Q-4 2017<br />
Vol. IV 2018 Collaboration<br />
XIII Strategic Planning Q-1 2018<br />
XIV<br />
The Juvenile Justice<br />
Legislative Reform Initiative<br />
Q-2 2018<br />
XV The Advocacy Foundation Coalition Q-3 2018<br />
Page 125 of 147
XVI<br />
for Drug-Free Communities<br />
Landmark Cases in US<br />
Juvenile Justice (GA)<br />
Q-4 2018<br />
Page 126 of 147
Issue Title Quarterly<br />
Vol. V 2019 Organizational Development<br />
XVII The Board of Directors Q-1 2019<br />
XVIII The Inner Circle Q-2 2019<br />
XIX Staff & Management Q-3 2019<br />
XX Succession Planning Q-4 2019<br />
XXI The Budget* Bonus #1<br />
XXII Data-Driven Resource Allocation* Bonus #2<br />
Vol. VI 2020 Missions<br />
XXIII Critical Thinking Q-1 2020<br />
XXIV<br />
The Advocacy Foundation<br />
Endowments Initiative Project<br />
Q-2 2020<br />
XXV International Labor Relations Q-3 2020<br />
XXVI Immigration Q-4 2020<br />
Vol. VII 2021 Community Engagement<br />
XXVII<br />
The 21 st Century Charter Schools<br />
Initiative<br />
Q-1 2021<br />
XXVIII The All-Sports Ministry @ ... Q-2 2021<br />
XXIX Lobbying for Nonprofits Q-3 2021<br />
XXX<br />
XXXI<br />
Advocacy Foundation Missions -<br />
Domestic<br />
Advocacy Foundation Missions -<br />
International<br />
Q-4 2021<br />
Bonus<br />
Page 127 of 147
Vol. VIII<br />
2022 ComeUnity ReEngineering<br />
XXXII<br />
The Creative & Fine Arts Ministry<br />
@ The Foundation<br />
Q-1 2022<br />
XXXIII The Advisory Council & Committees Q-2 2022<br />
XXXIV<br />
The Theological Origins<br />
of Contemporary Judicial Process<br />
Q-3 2022<br />
XXXV The Second Chance Ministry @ ... Q-4 2022<br />
Vol. IX 2023 Legal Reformation<br />
XXXVI The Fifth Amendment Project Q-1 2023<br />
XXXVII The Judicial Re-Engineering Initiative Q-2 2023<br />
XXXVIII<br />
The Inner-Cities Strategic<br />
Revitalization Initiative<br />
Q-3 2023<br />
XXXVIX Habeas Corpus Q-4 2023<br />
Vol. X 2024 ComeUnity Development<br />
XXXVX<br />
The Inner-City Strategic<br />
Revitalization Plan<br />
Q-1 2024<br />
XXXVXI The Mentoring Initiative Q-2 2024<br />
XXXVXII The Violence Prevention Framework Q-3 2024<br />
XXXVXIII The Fatherhood Initiative Q-4 2024<br />
Vol. XI 2025 Public Interest<br />
XXXVXIV Public Interest Law Q-1 2025<br />
L (50) Spiritual Resource Development Q-2 2025<br />
Page 128 of 147
LI<br />
Nonprofit Confidentiality<br />
In The Age of Big Data<br />
Q-3 2025<br />
LII Interpreting The Facts Q-4 2025<br />
Vol. XII 2026 Poverty In America<br />
LIII<br />
American Poverty<br />
In The New Millennium<br />
Q-1 2026<br />
LIV Outcome-Based Thinking Q-2 2026<br />
LV Transformational Social Leadership Q-3 2026<br />
LVI The Cycle of Poverty Q-4 2026<br />
Vol. XIII 2027 Raising Awareness<br />
LVII ReEngineering Juvenile Justice Q-1 2027<br />
LVIII Corporations Q-2 2027<br />
LVIX The Prison Industrial Complex Q-3 2027<br />
LX Restoration of Rights Q-4 2027<br />
Vol. XIV 2028 Culturally Relevant Programming<br />
LXI Community Culture Q-1 2028<br />
LXII Corporate Culture Q-2 2028<br />
LXIII Strategic Cultural Planning Q-3 2028<br />
LXIV<br />
The Cross-Sector/ Coordinated<br />
Service Approach to Delinquency<br />
Prevention<br />
Q-4 2028<br />
Page 129 of 147
Vol. XV 2029 Inner-Cities Revitalization<br />
LXIV<br />
LXV<br />
LXVI<br />
Part I – Strategic Housing<br />
Revitalization<br />
(The Twenty Percent Profit Margin)<br />
Part II – Jobs Training, Educational<br />
Redevelopment<br />
and Economic Empowerment<br />
Part III - Financial Literacy<br />
and Sustainability<br />
Q-1 2029<br />
Q-2 2029<br />
Q-3 2029<br />
LXVII Part IV – Solutions for Homelessness Q-4 2029<br />
LXVIII<br />
The Strategic Home Mortgage<br />
Initiative<br />
Bonus<br />
Vol. XVI 2030 Sustainability<br />
LXVIII Social Program Sustainability Q-1 2030<br />
LXIX<br />
The Advocacy Foundation<br />
Endowments Initiative<br />
Q-2 2030<br />
LXX Capital Gains Q-3 2030<br />
LXXI Sustainability Investments Q-4 2030<br />
Vol. XVII 2031 The Justice Series<br />
LXXII Distributive Justice Q-1 2031<br />
LXXIII Retributive Justice Q-2 2031<br />
LXXIV Procedural Justice Q-3 2031<br />
LXXV (75) Restorative Justice Q-4 2031<br />
LXXVI Unjust Legal Reasoning Bonus<br />
Page 130 of 147
Vol. XVIII 2032 Public Policy<br />
LXXVII Public Interest Law Q-1 2032<br />
LXXVIII Reforming Public Policy Q-2 2032<br />
LXXVIX ... Q-3 2032<br />
LXXVX ... Q-4 2032<br />
Page 131 of 147
The e-Advocate Monthly Review<br />
2018<br />
Transformational Problem Solving January 2018<br />
The Advocacy Foundation February 2018<br />
Opioid Initiative<br />
Native-American Youth March 2018<br />
In the Juvenile Justice System<br />
Barriers to Reducing Confinement April 2018<br />
Latino and Hispanic Youth May 2018<br />
In the Juvenile Justice System<br />
Social Entrepreneurship June 2018<br />
The Economic Consequences of<br />
Homelessness in America S.Ed – June 2018<br />
African-American Youth July 2018<br />
In the Juvenile Justice System<br />
Gang Deconstruction August 2018<br />
Social Impact Investing September 2018<br />
Opportunity Youth: October 2018<br />
Disenfranchised Young People<br />
The Economic Impact of Social November 2018<br />
of Social Programs Development<br />
Gun Control December 2018<br />
2019<br />
The U.S. Stock Market January 2019<br />
Prison-Based Gerrymandering February 2019<br />
Literacy-Based Prison Construction March 2019<br />
Children of Incarcerated Parents April 2019<br />
Page 132 of 147
African-American Youth in The May 2019<br />
Juvenile Justice System<br />
Racial Profiling June 2019<br />
Mass Collaboration July 2019<br />
Concentrated Poverty August 2019<br />
De-Industrialization September 2019<br />
Overcoming Dyslexia October 2019<br />
Overcoming Attention Deficit November 2019<br />
The Gift of Adversity December 2019<br />
2020<br />
The Gift of Hypersensitivity January 2020<br />
The Gift of Introspection February 2020<br />
The Gift of Introversion March 2020<br />
The Gift of Spirituality April 2020<br />
The Gift of Transformation May 2020<br />
Property Acquisition for<br />
Organizational Sustainability June 2020<br />
Investing for Organizational<br />
Sustainability July 2020<br />
Biblical Law & Justice TLFA August 2020<br />
Gentrification AF September 2020<br />
Environmental Racism NpA October 2020<br />
Law for The Poor AF November 2020<br />
…<br />
Page 133 of 147
2021<br />
Biblically Responsible Investing TLFA – January 2021<br />
International Criminal Procedure LMI – February 2021<br />
Spiritual Rights TLFA – March 2021<br />
The Theology of Missions TLFA – April 2021<br />
Legal Evangelism, Intelligence,<br />
Reconnaissance & Missions LMI – May 2021<br />
The Law of War LMI – June 2021<br />
Generational Progression AF – July 2021<br />
Predatory Lending AF – August 2021<br />
The Community Assessment Process NpA – September 2021<br />
Accountability NpA – October 2021<br />
Nonprofit Transparency NpA – November 2021<br />
Redefining Unemployment AF – December 2021<br />
2022<br />
21 st Century Slavery AF – January 2022<br />
Acquiesce to Righteousness TLFA – February 2022<br />
ComeUnity Capacity-Building NpA – March 2022<br />
Nonprofit Organizational Assessment NpA – April 2022<br />
<strong>Debt</strong> <strong>Reduction</strong> & <strong>Debt</strong> <strong>Relief</strong> AF – May 2022<br />
…<br />
Page 134 of 147
The e-Advocate Quarterly<br />
Special Editions<br />
Crowdfunding Winter-Spring 2017<br />
Social Media for Nonprofits October 2017<br />
Mass Media for Nonprofits November 2017<br />
The Opioid Crisis in America: January 2018<br />
Issues in Pain Management<br />
The Opioid Crisis in America: February 2018<br />
The Drug Culture in the U.S.<br />
The Opioid Crisis in America: March 2018<br />
Drug Abuse Among Veterans<br />
The Opioid Crisis in America: April 2018<br />
Drug Abuse Among America’s<br />
Teens<br />
The Opioid Crisis in America: May 2018<br />
Alcoholism<br />
The Economic Consequences of June 2018<br />
Homelessness in The US<br />
The Economic Consequences of July 2018<br />
Opioid Addiction in America<br />
Page 135 of 147
The e-Advocate Journal<br />
of Theological Jurisprudence<br />
Vol. I - 2017<br />
The Theological Origins of Contemporary Judicial Process<br />
Scriptural Application to The Model Criminal Code<br />
Scriptural Application for Tort Reform<br />
Scriptural Application to Juvenile Justice Reformation<br />
Vol. II - 2018<br />
Scriptural Application for The Canons of Ethics<br />
Scriptural Application to Contracts Reform<br />
& The Uniform Commercial Code<br />
Scriptural Application to The Law of Property<br />
Scriptural Application to The Law of Evidence<br />
Page 136 of 147
Legal Missions International<br />
Page 137 of 147
Issue Title Quarterly<br />
Vol. I 2015<br />
I<br />
II<br />
God’s Will and The 21 st Century<br />
Democratic Process<br />
The Community<br />
Engagement Strategy<br />
Q-1 2015<br />
Q-2 2015<br />
III Foreign Policy Q-3 2015<br />
IV<br />
Public Interest Law<br />
in The New Millennium<br />
Q-4 2015<br />
Vol. II 2016<br />
V Ethiopia Q-1 2016<br />
VI Zimbabwe Q-2 2016<br />
VII Jamaica Q-3 2016<br />
VIII Brazil Q-4 2016<br />
Vol. III 2017<br />
IX India Q-1 2017<br />
X Suriname Q-2 2017<br />
XI The Caribbean Q-3 2017<br />
XII United States/ Estados Unidos Q-4 2017<br />
Vol. IV 2018<br />
XIII Cuba Q-1 2018<br />
XIV Guinea Q-2 2018<br />
XV Indonesia Q-3 2018<br />
XVI Sri Lanka Q-4 2018<br />
Page 138 of 147
Vol. V 2019<br />
XVII Russia Q-1 2019<br />
XVIII Australia Q-2 2019<br />
XIV South Korea Q-3 2019<br />
XV Puerto Rico Q-4 2019<br />
Issue Title Quarterly<br />
Vol. VI 2020<br />
XVI Trinidad & Tobago Q-1 2020<br />
XVII Egypt Q-2 2020<br />
XVIII Sierra Leone Q-3 2020<br />
XIX South Africa Q-4 2020<br />
XX Israel Bonus<br />
Vol. VII 2021<br />
XXI Haiti Q-1 2021<br />
XXII Peru Q-2 2021<br />
XXIII Costa Rica Q-3 2021<br />
XXIV China Q-4 2021<br />
XXV Japan Bonus<br />
Vol VIII 2022<br />
XXVI Chile Q-1 2022<br />
Page 139 of 147
The e-Advocate Juvenile Justice Report<br />
______<br />
Vol. I – Juvenile Delinquency in The US<br />
Vol. II. – The Prison Industrial Complex<br />
Vol. III – Restorative/ Transformative Justice<br />
Vol. IV – The Sixth Amendment Right to The Effective Assistance of Counsel<br />
Vol. V – The Theological Foundations of Juvenile Justice<br />
Vol. VI – Collaborating to Eradicate Juvenile Delinquency<br />
Page 140 of 147
The e-Advocate Newsletter<br />
Genesis of The Problem<br />
Family Structure<br />
Societal Influences<br />
Evidence-Based Programming<br />
Strengthening Assets v. Eliminating Deficits<br />
2012 - Juvenile Delinquency in The US<br />
Introduction/Ideology/Key Values<br />
Philosophy/Application & Practice<br />
Expungement & Pardons<br />
Pardons & Clemency<br />
Examples/Best Practices<br />
2013 - Restorative Justice in The US<br />
2014 - The Prison Industrial Complex<br />
25% of the World's Inmates Are In the US<br />
The Economics of Prison Enterprise<br />
The Federal Bureau of Prisons<br />
The After-Effects of Incarceration/Individual/Societal<br />
The Fourth Amendment Project<br />
The Sixth Amendment Project<br />
The Eighth Amendment Project<br />
The Adolescent Law Group<br />
2015 - US Constitutional Issues In The New Millennium<br />
Page 141 of 147
2018 - The Theological Law Firm Academy<br />
The Theological Foundations of US Law & Government<br />
The Economic Consequences of Legal Decision-Making<br />
The Juvenile Justice Legislative Reform Initiative<br />
The EB-5 International Investors Initiative<br />
2017 - Organizational Development<br />
The Board of Directors<br />
The Inner Circle<br />
Staff & Management<br />
Succession Planning<br />
Bonus #1 The Budget<br />
Bonus #2 Data-Driven Resource Allocation<br />
2018 - Sustainability<br />
The Data-Driven Resource Allocation Process<br />
The Quality Assurance Initiative<br />
The Advocacy Foundation Endowments Initiative<br />
The Community Engagement Strategy<br />
2019 - Collaboration<br />
Critical Thinking for Transformative Justice<br />
International Labor Relations<br />
Immigration<br />
God's Will & The 21st Century Democratic Process<br />
The Community Engagement Strategy<br />
The 21st Century Charter Schools Initiative<br />
2020 - Community Engagement<br />
Page 142 of 147
Extras<br />
The Nonprofit Advisors Group Newsletters<br />
The 501(c)(3) Acquisition Process<br />
The Board of Directors<br />
The Gladiator Mentality<br />
Strategic Planning<br />
Fundraising<br />
501(c)(3) Reinstatements<br />
The Collaborative US/ International Newsletters<br />
How You Think Is Everything<br />
The Reciprocal Nature of Business Relationships<br />
Accelerate Your Professional Development<br />
The Competitive Nature of Grant Writing<br />
Assessing The Risks<br />
Page 143 of 147
Page 144 of 147
About The Author<br />
John C (Jack) Johnson III<br />
Founder & CEO<br />
Jack was educated at Temple University, in Philadelphia, Pennsylvania and Rutgers<br />
Law School, in Camden, New Jersey. In 1999, he moved to Atlanta, Georgia to pursue<br />
greater opportunities to provide Advocacy and Preventive Programmatic services for atrisk/<br />
at-promise young persons, their families, and Justice Professionals embedded in the<br />
Juvenile Justice process in order to help facilitate its transcendence into the 21 st Century.<br />
There, along with a small group of community and faith-based professionals, “The Advocacy Foundation, Inc." was conceived<br />
and developed over roughly a thirteen year period, originally chartered as a Juvenile Delinquency Prevention and Educational<br />
Support Services organization consisting of Mentoring, Tutoring, Counseling, Character Development, Community Change<br />
Management, Practitioner Re-Education & Training, and a host of related components.<br />
The Foundation’s Overarching Mission is “To help Individuals, Organizations, & Communities Achieve Their Full Potential”, by<br />
implementing a wide array of evidence-based proactive multi-disciplinary "Restorative & Transformative Justice" programs &<br />
projects currently throughout the northeast, southeast, and western international-waters regions, providing prevention and support<br />
services to at-risk/ at-promise youth, to young adults, to their families, and to Social Service, Justice and Mental<br />
Health professionals” everywhere. The Foundation has since relocated its headquarters to Philadelphia, Pennsylvania, and been<br />
expanded to include a three-tier mission.<br />
In addition to his work with the Foundation, Jack also served as an Adjunct Professor of Law & Business at National-Louis<br />
University of Atlanta (where he taught Political Science, Business & Legal Ethics, Labor & Employment Relations, and Critical<br />
Thinking courses to undergraduate and graduate level students). Jack has also served as Board President for a host of wellestablished<br />
and up & coming nonprofit organizations throughout the region, including “Visions Unlimited Community<br />
Development Systems, Inc.”, a multi-million dollar, award-winning, Violence Prevention and Gang Intervention Social Service<br />
organization in Atlanta, as well as Vice-Chair of the Georgia/ Metropolitan Atlanta Violence Prevention Partnership, a state-wide<br />
300 organizational member, violence prevention group led by the Morehouse School of Medicine, Emory University and The<br />
Original, Atlanta-Based, Martin Luther King Center.<br />
Attorney Johnson’s prior accomplishments include a wide-array of Professional Legal practice areas, including Private Firm,<br />
Corporate and Government postings, just about all of which yielded significant professional awards & accolades, the history and<br />
chronology of which are available for review online. Throughout his career, Jack has served a wide variety of for-profit<br />
corporations, law firms, and nonprofit organizations as Board Chairman, Secretary, Associate, and General Counsel since 1990.<br />
www.TheAdvocacy.Foundation<br />
Clayton County Youth Services Partnership, Inc. – Chair; Georgia Violence Prevention Partnership, Inc – Vice Chair; Fayette<br />
County NAACP - Legal Redress Committee Chairman; Clayton County Fatherhood Initiative Partnership – Principal<br />
Investigator; Morehouse School of Medicine School of Community Health Feasibility Study - Steering Committee; Atlanta<br />
Violence Prevention Capacity Building Project – Project Partner; Clayton County Minister’s Conference, President 2006-2007;<br />
Liberty In Life Ministries, Inc. – Board Secretary; Young Adults Talk, Inc. – Board of Directors; ROYAL, Inc - Board of<br />
Directors; Temple University Alumni Association; Rutgers Law School Alumni Association; Sertoma International; Our<br />
Common Welfare Board of Directors – President)2003-2005; River’s Edge Elementary School PTA (Co-President); Summerhill<br />
Community Ministries; Outstanding Young Men of America; Employee of the Year; Academic All-American - Basketball;<br />
Church Trustee.<br />
Page 145 of 147
www.TheAdvocacyFoundation.org<br />
Page 146 of 147
Page 147 of 147