A number of weeks ago I blogged about “Dis Or Dat – Bankruptcy or Foreclosure?”, showing how, with some clients considering bankruptcy, it would be just as well for them to move into more affordable housing, while other situations warrant doing everything possible to keep the family in their home.
Less than a week ago, President Bush and Treasury Secretary Paulson got the government involved in the discussion. The adminstration announced an agreement that grew out of a task force called HOPE NOW. This task force is made up of business leaders and government officials working together. One of the first steps of the plan they came up with is meant to help borrowers whose mortgage rates are about to reset at a higher interest rate, by putting a five-year rate “freeze” on certain kinds of mortgage loans.
There are several additional proposals that the President is hoping will pass in the Senate as well as in the House. Two of these ideas involve allowing states and cities to issue tax-free municipal bonds for the purpose of helping homeowners refinance their mortgages at lower rates, and changing the tax code to allow homeowners to sell their homes for less than their mortgage without realizing any taxable income.
As an Indiana bankruptcy attorney I am vitally interested in all issues surrounding mortgages, foreclosures, and debt in general. None of the President’s proposals has been enacted into law yet. But what all this discussion says to me as a consumer bankruptcy specialist is that people’s debt problems are beginning to get the attention of lawmakers and politicians.
The changes being talked about would allow my clients (and all Indiana citizens) more choices as we work together to address their debt problems and launch their financial New Start!.