A Bailout for Everyone...But the Little Guy

$1,000,000,000,000 for the Toxic Asset Recovery Program. $25,000,000,000 for automakers. AIG gets $150,000,000. How much are you getting?...$0. So the bail-outs for the Big Guys go on & on & on. Everybody has their hand out. Big Business and Big Banking is getting money thrown at them at a record pace. All of this while unemployment goes up. Foreclosures are up. House prices fall. For the second consecutive Quarter in Houston, Texas, home sales and prices have fallen. Credit gets tighter. Is there going to be any help for the regular person trying to pay mortgages, school loans, credit card debts, car loans, and high utility bills? I don’t think so.
So, what is a regular person to do?
Hopefully, some help is on the way. Congress has actually attempted to address some of these problems through changes in the Bankruptcy Code. From the beginning of the current law in 1978, residential mortgage debt has retained a special protection that no other creditor was afforded. GMAC, Ford MCC and others were subject to having their debt modified in a bankruptcy proceeding (interest rates adjusted, principal lowered to the actual value of the collateral, terms of loans extended). Residential mortgages were exempt. The House has passed a law to change the Bankruptcy Code to allow these same modifications to mortgages by a Bankruptcy Court. This would be mandatory and allow consumers, not just those meeting restrictive guidelines in the current voluntary plans, to change the terms of their mortgages. Adjustable mortgage rates would be lowered and fixed; “Underwater” mortgages would be reduced to actual house value; terms could be extended when necessary.

This bankruptcy modification bill is moving slowly through the Senate. It is meeting great resistance from mortgage companies, but may be brought to a vote by Memorial Day.[i]

Call your Senator and let them know you support these changes to the Bankruptcy Code. Fairness is all we ask.

[1]See this article in the Washington Post. http://www.washingt%20onpost.com/%20wp-dyn/content/%20article/2009/%2004/20/AR20090420%2003230_pf.%20html



For more information, see my website at http://www.johnesmithlawoffice.com/

Why Bankruptcy Help?

When I graduated Baylor Law School in 1980, I was intent on being the next great trial attorney. A few years later, my firm sent me to handle a case in Bankruptcy Court. At this point, I had taken no courses in Bankruptcy Law, had not read the Bankruptcy Code, and didn’t even know where the Bankruptcy Court was located in Houston. I soon discovered that I both enjoyed Bankruptcy Law and had a knack for it. More importantly I noticed something that was rare in my personal injury and family law cases- happy clients. It felt good to see the relief on my client’s faces when the case was finished and their debt problems were removed.

I became more involved in bankruptcy work and before long it was all I was doing. I became involved in local bankruptcy Bar Associations (President three terms), many committee assignments appointed by the Judges of the Southern district of Texas-Houston, and frequent speaking engagements on bankruptcy topics. At one time, I had offices in College Station, Waco, Lake Jackson, and Galveston. My current offices are in Houston and Friendswood.

The more I understood Bankruptcy Law, the more I saw how it could help families recover from devastating debt issues. Through Chapter 7 Liquidation and reorganization cases, I was able to help individuals and businesses survive bad situations. Now, after almost 26 years, I still love what I do.
For more information, visit my website at http://www.johnesmithlawoffice.com/