Bankruptcy and Foreclosure – Strange Political Bedfellows?

14 Oct Bankruptcy and Foreclosure – Strange Political Bedfellows?

No, this isn’t an article about the “new” bankruptcy law that turns 7 years old this week. This is a story about two candidates for an open seat in the U.S. Senate and how bankruptcy and foreclosure are shaping the race. The names and the places are not being disclosed not to protect the innocent because there are no innocent parties involved, but to allow your reaction to be honest and to see how you react to the moral questions posed at the end of this article. (If you really want to know who I am talking about, you can find out through a little simple sleuthing.)

The are two nominees for the open Senate seat in my state this election; the first we’ll call the “Challenger”, and the second the “Opposition”. Through the mudslinging and accusations that are typical with a political race, two important facts have emerged. The Challenger filed bankruptcy in 1976 wiping out nearly $1 million in debt and the Opposition fell into foreclosure some years ago. The Challenger today is a successful business woman that has a net worth of 100’s of millions of dollars and the Opposition was able to reinstate his mortgage and refinanced out of the defaulted loan that he had.

Both are success stories, right? Wel,l the Challenger has accused the Opposition of not being able to handle his money, while the Opposition has accused the Challenger of essentially being immoral for not paying back her creditors from 36 years ago now that she is successful and has all that money. Typical pot callingthe kettle black.

Instead, shouldn’t the Challenger’s position be, “Without bankruptcy, I would have never had the second chance that everyone deserves under the lawand given theopportunity to become successful. If elected, I would uphold the remedy of bankruptcy for financial difficulties and I would work to make the bankruptcy law stronger to give others that second chance so they can become successful like me.”

And the Opposition’s response to the foreclosure incident should be, “I have experienced first-hand what millions of families in this this country have experienced over the past six years and I will work to help solve the foreclosure problem we have in this country and reinforce the benefits of home-ownership.”

Sadly, neither candidate has taken that approach and no one has asked the question of them.

And so, here are the questions, you should ponder:

  • Should the Challenger pay back her creditors that were discharged in bankruptcy now that her second chance has allowed her to become wealthy?
  • And is the Opposition a bad guy because he “allowed” a foreclosure to start and then refinanced his way out of the problem?

In November, the voters will choose. Stay tuned…

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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