An Illinois House candidate who says he wants to help Illinois dig out of debt and stop overspending has himself faced financial challenges that led to a foreclosure and bankruptcy.
David Paul Blumenshine, a real estate broker, lost his Bloomington home to a foreclosure in 2014, followed shortly after by a filing in U.S. bankruptcy court, records show. Blumenshine will face incumbent state Rep. Dan Brady of Bloomington in the March 17 Republican primary.
Blumenshine said the financial problems were difficult to navigate, but he was “better for it” in part because he can better empathize with those who face their own challenges.
Blumenshine’s major campaign issues are balancing the state’s budget, reducing its debt, and lowering taxes. Blumenshine said he doesn’t think his own financial history undercuts his ability to deliver on those campaign promises.
“If you rise from the ashes, I don’t know, you tell me?” Blumenshine told WGLT. “Who’s better off with knowing these things—somebody who created the problem and is unwilling to do anything about it, or somebody who’s walked through the problems and found a way out of it?”
Blumenshine said the foreclosure and bankruptcy happened because of his divorce from his ex-wife, Julia, which was filed in 2011. They shared a home at 407 Florence Ave. in Bloomington, near Oakland Elementary School. After the divorce, David stayed in the home, and the reduced income from a one-parent household was too much to overcome, David told WGLT.
Blumenshine stopped making payments on two mortgages on the home starting in October 2011, lender Citizens Bank of Chatsworth said in court documents. Blumenshine spent 17 months in a court-required mediation program, exploring “every possible alternative to avoid foreclosure,” the bank said. But the process was “unsuccessful because modification terms (David and Julia) required due to their divorce,” the bank said in a February 2014 filing.
Blumenshine confirmed he worked with Citizens Bank of Chatsworth—also his business lender—to get a loan modification but was unsuccessful.
“That was the only outstanding debt I had through all the years being in business,” he said. “In time of need, the lender wasn’t willing to work with me. I get that. They’re a bank.”
In a handwritten note to the court around that time, Blumenshine said he was pleading “not guilty” in the foreclosure case and that Citizens Bank of Chatsworth was not negotiating in good faith. He said he was willing to offer a deed in lieu of foreclosure that waived any and all deficiency judgment against him. The bank fired back and said his handwritten response was unverified—lacking the weight of a verified response that legally requires the truth, under punishment of a felony charge—and in “contradiction to the rules of civil procedure.”
Ultimately, a judgment of foreclosure was issued against the Blumenshines, tallying up total indebtedness (mortgages, interest, attorneys’ fees and other costs) at $242,634. The house was sold back to the bank for $157,900 at a foreclosure sale in December 2014. The bank re-sold it to a new owner in 2015 for $130,000, property records show.
After the foreclosure sale, the Blumenshines still owed their lender $84,734, court records show.
Bankruptcy Filing
Around this time, David filed for bankruptcy under Chapter 13 of the bankruptcy code. Chapter 13 is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Blumenshine was one of 310,914 Chapter 13 bankruptcy filings in the U.S. in 2014, according to the Administrative Office of the U.S. Courts.
Among his creditors were Citizens Bank of Chatsworth. There was also $75,842 owed to unsecured creditors, mostly student loan servicer Nelnet but also OSF Medical Group and Discover Financial Services credit card company, court records show. Ultimately, in June 2014 Blumenshine agreed to a Chapter 13 repayment plan spread out over five years, records show. In December 2014, he told the court he completed an online personal financial management class.
Blumenshine has since remarried. His wife, Tanya, is listed as the treasurer for his campaign committee. He said they’ve also taken a class through Dave Ramsey, who popularized the “debt is dumb” catchphrase and helps people navigate their financial challenges.
Last week Blumenshine told WGLT he and Tanya are now debt-free, except for a modest mortgage on their home.
“It came through the same principles that I’m talking about that the state has to step through. It’s not easy. And I think somebody who obviously walked the fire—because I’m not alone, there’s a whole host of people facing the same thing—I’m better for it. It’s hard to empathize and know what people are going through,” Blumenshine said.
Blumenshine is still a licensed real estate broker. He is also a full-time driver for Unit 5, transporting students with disabilities in the district's vocational transitional assistance program.
He said he preaches the “Dave Ramsey model” with his real estate clients. He said he doesn’t work with buyers unless they can put 10% down on the home, and then he’d only steer them into a 15-year mortgage.
“I try to encourage people to be fiscally responsible,” he said.
Blumenshine also faced a more recent small-claims case. The owner of Our Home Marketplace magazine, Marshall Elkin, claimed in October 2016 that Blumenshine owed him $1,390 for real estate advertising he never paid for, records show. The court entered a judgment against Blumenshine of $1,587. Blumenshine said Monday that was paid off in full “years ago.”
Elkin confirmed Monday he was paid in full, and that he supports Blumenshine's campaign for state representative.
"David has always been a good friend," Elkin said. "There is no animosity."
When asked why bankruptcy was the right option for him in 2014, Blumenshine said “unless a person goes through that, it’s hard to say.”
“Emotionally, your life has now been turned upside down. Would I have done it differently today? Yes,” Blumenshine said. “Divorce is ugly. It impacts everything about your life. And it sure did mine at the time. The beautiful thing is there’s recovery.”
Dan Brady is a licensed funeral director and embalmer, and is a partner in the funeral home firm Kibler-Brady-Ruestman. He is also a former McLean County coroner.
"I have a record I run on. And he has a record he has to run on," Brady said Monday.
The 105th House District includes the north half of Bloomington-Normal and many rural parts of northeastern McLean County.
