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Bankruptcy Attorney, Theodore Araujo Talks Greed in the Mortgage Market.

May 29, 2013 06:47pm  

Syracuse, NY—According to Theodore Araujo, the recently appointed Chair for the National Association of Consumer Bankruptcy Attorneys (NACBA) for the Northern and Western Districts of New York, bankruptcy is “the great equalizer.”

“The best thing about it is that the process gives the little guy a great deal of power over large financial institutions,” Araujo told islaws.com in a recent interview.  “The ability of powerful and wealthy corporations to delay, obfuscate, run up the legal bill or otherwise prevent the client from getting their day in court is not possible to a very great extent in bankruptcy courts.”

(More on  News at IsLAWS.com)

Araujo, who worked for venture capital firm Cygnus Management Group before acquiring his bankruptcy practice, believes that financial companies have contributed to the number of people who have had to declare bankruptcy over the last several years.  

“The major financial institutions in this country are committing widespread fraud, especially in the mortgage markets,” he says.  “The greed and avarice shown during the boom years, under the guise of making credit available to people who really could not have qualified for mortgages using responsible underwriting practices, has completely undermined the financial system.”

“I would suggest that those who control the levers of power remember that they, their loved ones, or their constituents may one day need my help,” Araujo reflected.  “Make sure the system of relief does not become so cumbersome that people like me will no longer want to be here to provide that help.”

Changes to the bankruptcy code that took effect in 2005 have made life more difficult for consumers without providing many benefits, according to Araujo:  “The biggest negatives have been the added administrative burdens and costs because of useless requirements for pre-filing education, and the creation of additional forms and filing requirements that have had zero substantive impact on the relief for people who file.”

However, Araujo cites New York's increased bankruptcy exemptions, which he says “allow the truly needy to continue to benefit from filing bankruptcy,” as evidence that the state, at least, is listening to the needs of filers.

While people could often file earlier, Araujo says that most of his clients “come to me only at the end of a long period where they have fought to pay back their debts.  The vast majority of people exhaust assets, take on non-dischargeable debt like second mortgages—exhausting equity we could have protected—and go to great lengths to pay back their obligations.”

Contrary to the idea that most bankruptcy filers have been irresponsible, Araujo says that bankruptcy is often unpredictable and unpreventable.  “If there was a choice, a practice, or a lifestyle that could prevent bankruptcy, I would know it, but there is none,” he says.  “Bankruptcy is not a choice for the vast majority in financial need; it is imposed on them by circumstances.”

Helping these clients out is what makes Araujo's job so rewarding: “The vast majority of people who come to me for representation never thought they would have to be in a chair across from a bankruptcy attorney.  It is the worst day of their lives—hopefully I make it better.”

If you would like to know more about Theodore Araujo and Bodow Law Firm, PLLC click here.

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