Church Gift, Multiplied 100X by Innovative Non-Profit, to Help the County’s Poorest

In worship services today, Covenant Senior Pastor Thomas Daniel shared that a $100,000 Covenant donation will relieve $10 million worth of secondary medical debt for the poorest households in Travis County.

Covenant was able to do this through RIP Medical Debt, a non-profit organization that purchases medical debt that has gone into collection. This type of debt is sold for pennies on the dollar: a $1 purchase will relieve $100 dollars of debt. Instead of collecting on that debt, RIP Medical forgives it. Covenant’s donation of $100K will forgive $10 million dollars of medical debt in Travis County.

“We are so happy to be able to really live out our call to be a love letter to Austin,” Thomas said. “In this time of uncertainty, we are still fulfilling our mission to follow Jesus wherever we live, work and play. And while many things are changing, our mission stays the same. We want to provide hope for the people right here in our community.”

Budget Surplus
At the end of 2019, Covenant had a budget surplus. The church funneled $100,000 to our mission committee. Covenant’s Mission Director, Whitney Bell, said her team started researching the best way to use the budget surplus and discovered RIP Medical Debt.

The team learned that Travis County’s most needy households were holding about $10 million of the area’s medical debt that was qualified to receive help from RIP Medical Debt, based on the non-profit’s criteria for distribution.

“This money will go to help the poorest of the poor,” Whitney said. “These are people who have to make decisions whether to pay for their medical bills or pay their rent. Medical debt is never a result of a bad choice; it’s the result of an emergency. And it can haunt folks for a long time. To be able to abolish that points directly to the call of Christ to love our neighbor.”

Who Exactly Qualifies?
Secondary medical debt is debt that has already been defaulted on, and the hospitals or medical providers have sold it to debt collectors. RIP Medical Debt uses precise data analytics to distribute funds. Secondary debt purchased by the organization must meet one of three criteria:

  • Debtors earn less than two-times (2x) the federal poverty level (varies by state, family size)
  • Debts are five percent or more of annual income.
  • Debtors are facing insolvency — their debts are greater than their assets.

Typically within six to eight weeks, individuals and families receive letters telling them that their debt, in its entirety, has been forgiven.

More about RIP Medical Debt
RIP Medical Debt was started in 2014 by two collectors who didn’t like their jobs and wanted to do something good. Statistics show that 66 percent of all bankruptcies are related to medical debt and 25 percent of credit card debt is medical. Armed with the knowledge gained from their jobs and the toll medical bills take on the nation’s poor, they launched RIP Medical Debt. One hundred percent of all donations to RIP go toward the medical debt of the country’s poorest people. Find the answers to your questions about how RIP distributes funds, who gets them and more in the organzation’s FAQ.