As We Forgive Our Debtors

Foreign debt relief doesn’t seem all that enticing a topic.

It involves large numbers and terms like “hedge fund” that may not be as familiar to us as terms like “orphanage.”

I would dare to say that most of us love to help others.  To this end, we are spurred to advocacy by images of starving children, AIDS ravished families, and inadequate health- and educational facilities in third world countries.

Unfortunately, reading about internationally waged legal battles over billions of dollars of debt just doesn’t strike this same heart chord.  It’s an “over there” type of issue but without the moving pictures to “bring it home” to us.  It’s also a bit boring, frankly, and we tend to assume that what we’re hearing about is “fake money.”  For instance, when we read that Zambia must pay off a debt incurred in the 1980’s, but now with millions of dollars of interest added, it kind of slides through our ears as a ridiculous notion.  After all, one can’t squeeze blood from a turnip.

But there are those who know better.  They know that if they just keep wringing that turnip, they will eventually get blood.  God, the Catholic Church, and now the US through President Barack Obama, have all condemned this practice.  Given that the big guns have spoken on the issue, it is time that our community of social justice advocates takes a closer look at debt relief and its nemesis: vulture funds.

A Familiar Comparison

Most of us are familiar with debt collection agencies: Johnny fails to pay Company A the $100 he owes it.  Because it is a pain to go after Johnny’s $100, Company A agrees to sell its rights to the money to Company B for $10.  Eventually Johnny pays up, and Company B makes a $90 profit.

This isn’t such a bad set up—after all, Johnny incurred a debt that he’s obligated to repay,  and what does it matter to Johnny if he pays $100 to Company A or Company B?  Either way Johnny is out the cash.

That’s a nice and neat scenario, but what if Johnny didn’t borrow the money?  What if instead, his wife, who has now run off with the mailman and is nowhere to be found, borrowed it in Johnny’s name without his permission?  Or what if Johnny did borrow the money, but he did it to pay off hospital bills incurred from an on-the-job injury, then because of that same injury, expenses snowballed and now he’s penniless?

A Different Sort of Collection Agency: Vulture Funds

There are “collection agencies” that buy the debt of entire countries.  They buy it for pennies on the dollar, then go after the whole shebang plus exorbitant amounts of interest.  These people are called “vulture capitalists,” and they run what have been come to be called “vulture funds.”

Here’s what the experts have to say about these funds:

Often, these companies operate with little transparency as shell companies (a company set up exclusively to pursue one goal, in this case, poor country debt).  Vulture funds are known to be established in tax havens like the British Virgin Islands to avoid financial constraints and oversight.  Often, because of the secretive incorporation strategies and locales, there is limited or no information on who actually owns and manages these vulture funds. 

As of late 2011, 16 of 40 Heavily Indebted Poor Countries (HIPC) surveyed by the IMF were facing litigation in 78 individual cases brought by commercial creditors.  Of these, 36 cases have resulted in court judgments against HIPCs amounting to approximately $1 billion on original claims worth roughly $500 million.

The main reason these guys are called “vultures” is that they specifically target countries that are close to having their debt partially or totally forgiven.  Debt forgiveness is a practice put into place to provide systematic debt relief for the poorest countries so that these countries can instead spend their limited funds on eradicating poverty.

Poor countries that are eligible for debt cancellation are especially vulnerable.  Vulture funds have been known to track the debt relief process, buy debt of nations that are going to get debt relief and then sue the country after it has received a windfall of resources thanks to debt cancellation.

An equivalent example might be marrying a rich person because you know they are just about to die and you want all their money.  Vulture-y indeed.

Yes, but if the country had paid back its debt to begin with, this would never have happened, right?



Almost always—or dare I say just “always”—the reasons for default are out of the peoples’ hands: natural disaster, unforeseeable financial crisis, and, more often than not, corrupt leaders who rack up debt knowing that they, personally, will never have to worry about paying it back out of their own pockets.  For example, Rwanda is paying off debts from the government responsible for its genocide, and South Africa is paying off debts from the Apartheid regime.  Like Johnny and his no-good wife, someone else has signed on the dotted line, agreeing to give your life away.

That doesn’t seem fair to us, but it still isn’t necessarily an enticing topic.  Where are the images of starving children?  Of poor women with tired eyes and strong hands?  Who cares if a government—a corrupt one at that—has its hand slapped and is dragged through court for years on end?

We should.

We are smart and sophisticated.  We know that poverty is the root of much of the world’s problems, yet we often feel helpless to fight it at a deeper level—at the root.

Envision many of the world’s problems as an enormous tree.  The roots—poverty—are sunk deeply and stretching into the ground.  The yawning branches above include inadequate education, lack of clean drinking water, famine, AIDS orphans, and all the other issues that spur our hearts to action.  Cutting the branches is a good thing, but I would argue that we are not actually helpless to address the deeper issues; we can indeed fight poverty at its root.

A significant way of doing this is advocating and volunteering for, and donating to, programs that advocate for both debt relief and for the end of vulture funds.  As governments struggle to pay back debts plus exorbitant interest to these vulture funds, they are forced to levy taxes and fees on the most basic of necessities.  Governments are unable to establish the services its people need, such as hospitals and schools, because all the money is going to paying back not just debt, but debt quadrupled by unfair and predatory practices.


When you donate $1 a week to an AIDS orphan,
pen letters to a young girl who is going to school on your dime,
write a check to fund clean drinking water,

how great would it be if the countries your money is going to could afford

to buy anti-viral drugs,
to build adequate schools,
to provide necessary infrastructure

instead of spending all their money on paying back decade’s old debt that somebody else incurred?

Forgive the Debt, Lose the Vultures

Poverty is the root of the heartstring problems, and when vulture funds swoop in, buy a country’s debt, then add on exorbitant interest, these problems only get worse.  Strike the root, and the tree will fall.

The Biblical importance of ending poverty can be found in Deuteronomy 15:4 (“There will be no one in need among you”), and in Leviticus 25, which sets forth the laws of Jubilee, a periodic pardon of debt when the mercies of God would be particularly manifest.  Economic experts speculate that

Such “clean slate” decrees were intended [by Babylonian kings] to redress the tendency of debtors, in ancient societies, to become hopelessly in debt to their creditors, thus accumulating most of the arable land into the control of a wealthy few.

This sounds very familiar even in our modern times—remember the rally cry “We are the 99%?”

…the Biblical legislation of the Jubilee and Sabbatical years addressed the same problems encountered by these Babylonian kings, but the Biblical formulation of the laws presented a significant advance in justice and the rights of the people.  (emphasis added).

If God wants to significantly advance justice and the rights of the people by wiping the slate clean, who are we to disagree?

As a nation of do-gooders, we must not simply work to make sure “there will be no one in need among us.”  We must also fight those who exacerbate the injustices of the world.  When we fight vulture funds, we are digging up the roots.

So when you are sitting at the kitchen table going over finances long after the kids are in bed, debating how best to spend your limited time and funds to hack away at the branches of the poverty tree, I ask that you remember you are not helpless against its root.  Sadly, there are no “ban vulture funds” mission trips.  There is no “fight vulture funds” equivalent to Habitat for Humanity where you can feel the weighty hammer in your hands and know you are building something lasting and of value.  But there are ways you can help.  There are organizations, such as Jubilee USA, that fight vulture funds, and they need your help to fight the good fight.  So while we can’t hop on a plane and spend ten weeks battling vulture funds in Zambia, we can use our money, time, and voice to assist those, like Jubilee, who are banding together people of faith to act on the Godly principles of helping the orphan and widow, and forgiving debts, as we forgive our debtors.

If you’d like to help fight vulture funds, please visit

6 thoughts on “As We Forgive Our Debtors

  1. Jamie, this is excellent. I’d say that the Old Covenant instructions on Jubilee not only indicate God wanted relief for the poor by way of wiping the slate clean, but he has also done the same for us in the New Covenant reality by wiping out our debt and giving us a clean slate in Christ.

    One part of your post puzzles me though, and I can’t tell if this is a quote you pulled or not: “Vulture funds have been known to track the debt relief process, buy debt of nations that are going to get debt relief and then sue the country after it has received a windfall of resources thanks to debt cancellation.” If the country has a “windfall of resources thanks to debt cancellation”, how can the vulture funds collect. They only stand in the shoes of the original creditor, right? If the creditor cancelled the debt, there’s nothing to collect, is there?



    • Thanks, Tim! To make sure you get the best answer possible, I passed your question to my husband, Andy — he is the expert in these matters! (Oh, and the quote is pulled, btw.) Here is Andy’s answer:

      “If a country has 100 creditors, and 99 of them agree to lower the amount of debt owed, but the 100th creditor decides it’s not worth it and sells their share of the debt to a vulture fund, what happens is that the Vulture Fund waits until those 99 creditors agree to allow, say, Zambia to save x dollars in debt payments, and then sue for the full amount of their share plus interest.

      So let’s say Zambia is given 50 million in debt relief, but the Vulture Fund sues it for 33 million. The Vulture Fund would argue that until it gets its 33 million right away, Zambia shouldn’t be allowed to get its debt relief because that money should go directly to the Vulture Fund.”


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