Bankruptcy

Community Group ACORN Nearing Bankruptcy?

By Chris Kramer

The Washington Post reported recently that the community organization ACORN (Association of Community Organizers for Reform Now) may be on the verge of filing for bankruptcy.

The group has, since its founding in 1970, devoted itself to helping low-income Americans find housing and to bringing voters from under-represented groups to the polls. Last fall, though, things took a turn for the worse for the group. Here?s what happened:

• Rising criticism: In the months after President Obama?s election, critics of ACORN apparently accused the group of fraudulent registration of voters and even internal embezzlement. And the bad press got worse once Obama took office.
• Video embarrassment: Last fall, two conservative activists posed as a pimp and prostitute and got advice from an ACORN counselor about how to hide their line of work from the government so they could buy a house for business purposes. They recorded the incident with hidden cameras and released them to news outlets, which caused serious controversy over ACORN?s aims and methods.
• Dried-up funding: After the video?s release, many of ACORN?s donors (including larger organizations and the government) reportedly withdrew much of their financial support, leaving ACORN underfunded.
• Withdrawal of state chapters: The Post notes that some of the bigger state chapters of ACORN (notably New York and California) have broken off from the parent organization and formed individual community support groups without the ACORN name.

Though representatives of ACORN itself have apparently not made any public comment about bankruptcy plans, a glance at the events of the past few months leaves little doubt that such a step would not be entirely surprising.

Effect on Consumers

Sources indicate that ACORN plans to continue dedicating itself to aiding and advocating for low-income Americans; however, they may do so under a new name and organization, both of which could be established during the bankruptcy process.

And if you?re worried about finding guidance through the home buying process, there?s no need to panic: the reorganization of ACORN leaves plenty of other groups and organizations available.

If you?re interested in becoming a homeowner but aren?t sure how to begin the process, visit the government?s Department of Housing and Urban Development (HUD) page for links to helpful resources and information on how to get moving toward your goal.

Full post as published by The Bankruptcy Blog on March 27, 2010 (boomark / email).