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A National Conversation on Bankruptcy?

posted by Elizabeth Warren

Bankruptcy isn't a very sexy political issue.  Don't get me wrong:  I think bankruptcy policy is critically important to working families.  In a world with inadequate health insurance, job insecurity, predatory lenders, family break ups and plain old financial mistakes, bankruptcy can be a family's last chance to get back into the economic mainstream. But no one sees bankruptcy in their future, and those who have been through it usually want to forget, so there is no special interest group for the protection of bankruptcy laws.

Today Senator Chris Dodd released a major policy statement entirely about bankruptcy.  The theme is that bankruptcy is a critical safety net for families.

Survivors of the Bankruptcy Wars (1995-2005) will remember Senator Dodd's many, many press conferences highlighting how families--particularly families headed by women--would be hurt by the proposed amendments.  Now he's pushing bankruptcy laws squarely into the national political conversation about the economic survival of the middle class.

Whether it is a sign of the extreme precariousness of millions of families or simply a more sophisticated understanding of the role bankruptcy plays in the larger economy, I'm glad to see bankruptcy issues included in a national domestic dialogue. 

The fact that the 2005 amendments created so many messes in the courts makes this conversation even more important to those who are trying to keep the system functioning.  The subprime mortgage meltdown may test the bankruptcy system in new ways.  Law profs, judges and practitioners have been talking about the role of the bankruptcy system for a long time, but Senator Dodd's announcement suggests the conversation may be going public. 


It's definitely nice to see topics such as bankruptcy and the collateral subjects being discussed in wider circles these days.

Personally, I could not believe what I was reading when I dove into Prof. Katherine Porter's "Misbehavior and Mistakes" study. It was like I was reading about the last six years of my life and the legal battle I've had going with Fairbanks Capital n/k/a Select Portfolio Servicing trying to save my home from an illegal foreclosure initiated by them in 2001. If I hadn't been awarded two permanent injunctions and a contempt order in the process I would have had to file for Chapter 13 myself. I also would not have a $13.5 million racketeering action filed in USD NH against SPS, LaSalle Bank, The PMI Group, Merrill Lynch and their local legal counsel, Harmon Law Offices.

I only hope that the world will recognize Prof. Porter's study for the greater work that it really is. The study, in and of itself, is from a bankruptcy POV. However, the study reflects the lives of literally hundreds of thousands of Mortgage Servicing Fraud victims like myself barreling toward bankruptcy. I'm simply the guy with the big mouth who is not afraid of the stigma that gets slapped on you when someone mentions the word "foreclosure" and your name in the same sentence. I was one of 281,100 Federal Trade Commission-certified victims of Fairbanks as certified in USA/Curry v. Fairbanks. That was just one company back in 2004. There are at least a dozen servicers using similar business platforms today which could easily translate into millions of homeowners fighting to save their homes from fraudulent foreclosures.

Thank you to everyone here who keeps an eye on topics like these and attempts to educate the general public. If there is ever anything that I can do from a borrower's standpoint please do not hesitate to contact me. I'll be more than happy to help in any way that I can.


Mike Dillon
Manchester, NH

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