Chicago Bankruptcy Lawyer Blog

A new court ruling raises doubts that hard-fought consumer protection laws will actually be able to protect consumers.

Earlier this month, the Supreme Court ruled that consumers who signed up for a credit card with a binding arbitration clause don't have the right to dispute creditors in court over unfair fees or charges. Instead, they must hire an independent (read: expensive) arbitrator.

Here's the kicker: many credit users don't even realize their card came with an arbitration clause because it was hidden among fine print in the credit card agreement. That's exactly the sort of sneaky behavior the formerly heralded Credit CARD Act of 2009 was supposed to prevent.

Critics say the 8-to-1 vote will only encourage credit card issuers and lenders to add even more clauses restricting consumers to arbitration down the road. Large credit card companies know that, when it comes to arbitration, consumers don't have much of a shot.

Chicago bankruptcy lawyers rarely hear of a credit card holder winning an arbitration case. This is probably because, as the top hirers of independent arbitrators, multi-billion-dollar credit card companies hold a lot of sway.

Data shows that in California, consumers won just 4 percent of cases between 2003 and early 2007, according to a story in SmartMoney. Credit card issuers won 94 percent of those cases.

When it comes to consumer protection, a Chicago bankruptcy is far more likely to help Illinois consumers than recent laws that are open to interpretation. Bankruptcy was created specifically with the intention of helping consumers plagued by years of credit card debt, medical bills, and other financial burdens.

Even if it's believed that a bank violated a provision of the Credit CARD Act, which was written to prevent random interest hikes and unfair fees, the arbitration clause would still take precedence. In addition, the ruling may restrict consumers from banding together in a class-action lawsuit because this would be considered going to court.

If you have a significant amount of credit card debt, a simple rate hike or the addition of a new fee could take paying the bills from difficult to impossible.

Most consumers don't realize they've been forced into binding mandatory arbitration. Do you hold a credit card from a major bank? There's a good chance your card came with an arbitration clause. To out if you're affected by the ruling, call your credit card issuer and request a copy of your most recent credit card agreement. You can usually find the clause in the dispute resolution section.

Most folks will never have to go to arbitration. But you increase your chances if you have a large, long-overdue balance - or if you become an unfortunate victim of identity theft.

By lowing debt, bankruptcy reduces the need for arbitration since credit issuers will be less likely to go after your debt and you'll be less likely to be adversely affected by a surprise interest rate hike.

When the pressure of debt is eliminated through a Chicago bankruptcy filing, you'll be out from under the thumb of creditors - and back in control of your own financial destiny.

Continue reading "As Limitations of Consumer Protection Laws Come to Light, Chicago Bankruptcy May Offer Solution" »

The good news is that Chicago foreclosure activity was at its lowest level in three years in 2011. The bad news is it's headed back upward.

A rising number of local homes were repossessed by lenders or sent to court-appointed auctions in the fourth quarter of last year, according to the Chicago Tribune. An estimated 11 percent more houses were repossessed in the last quarter of 2011, and 62 percent more properties were auctioned off.

Many experts predicted this temporary slowdown in foreclosure activity - not because folks were better able to afford their house payments, but because big banks put a halt on many foreclosures to investigate their flawed procedures. Now it looks like they're back in business.

But a foreclosure notice doesn't have to be a death sentence for home ownership. Chicago bankruptcy has the power to legally stop the foreclosure process, no matter how behind you are on your payments.

As of the fourth quarter, resolving a foreclosure case in Illinois took an average of 567 days. Now, many factors are involved that cause each particular case to differ - and there's no guaranteeing how fast the bank will foreclose on your home. But even if you are several months behind on your mortgage, there is time to take action if you're still in your house.

Since being delinquent on your mortgage payments - as with any bills - can seriously damage your credit score, it's always better to deal with your situation sooner rather than later. That said, Chicago bankruptcy lawyers have seen a bankruptcy filing stop foreclosure hours before a home sold at auction.

As foreclosure becomes an everyday threat for more people, the power of the automatic stay has become indispensable. An automatic stay is a court-ordered protection mechanism that goes into effect the moment a homeowner files for Chapter 13 bankruptcy. It then stays in effect throughout the 3-5 year repayment process.

After you have paid off the required amount of unsecured debts, the remainder of your debt burden will be forgiven.

Being underwater in your mortgage is not ideal, but it's not enough to threaten your home ownership. More often than not it's the other burdens - the credit card debt, the medical bills, the car payments - that make house payments so troublesome. Bankruptcy can relieve these burdens, making it possible to stay in your home.

Many folks mistakenly believe they can get away without making payments because they didn't receive a foreclosure notice right away. However, just because banks are slow to file paperwork doesn't mean they're going to give you a free ride. When you stop making payments, you're starting the foreclosure process rather you know it or not.
When you do nothing to stop foreclosure, you risk losing more than your house - you risk losing your freedom. Foreclosure hurts credit and leaves homeowners without a roof over their head.

By filing for bankruptcy in Chicago, you can avoid not only losing your home, but having to search for a new place to live. You will also have the chance to start building equity and repairing your credit.

In short, bankruptcy provides the breathing room you need to get back in control of those house payments - and get back on your feet financially.

Continue reading "After Decreasing Last Year, Chicago Foreclosure Activity Is Back on the Rise" »

Strategic default - in which a homeowner simply walks away from a mortgage - is on the rise.

In a Chicago area survey last year, 30 percent of homeowners who defaulted on their home loan were able to afford payments but chose to walk away.

Usually borrowers choose to walk because they owe more on their house than the house itself is worth. With real estate prices in Chicago continuing to fall, homeowners are realizing they won't recover value anytime soon and some are getting out now in order to save money.

But defaulting on a mortgage is not without consequences. Walking away damages credit, decreases your chances of qualifying for future loans, and comes with the risk of being pursued in court by lenders. Maybe most significantly, though, defaulting on your mortgage does nothing to lower your debts.

By filing for a Chicago bankruptcy, homeowners can keep a roof over their heads while freeing up more money for the mortgage each month.

Part of the problem is the mortgage system, according to a recent MSNBC.com article. In the past, people knew who owned their mortgage. In many cases, they received their loan from the teller at the local bank. Today, people are approved for loans online, then those loans are split up and sold off to faceless investors. Homeowners who try to get a loan modification often have difficulty determining who actually owns their loan. The incentive to follow through on payments just isn't the same as it used to be.

But while it may be easy for homeowners to walk away, dealing with the aftermath is not so simple. Any time you default on a loan, your credit score takes a serious hit. Keep in mind that your credit score affects your ability to rent a home or apartment and to qualify for affordable rates on future loans.

Then there's the risk of being pursued in court by lenders seeking a "deficiency judgment" - a court-ordered repayment of the mortgage in full. While homeowners often have an "it won't happen to me" attitude, lenders are stepping up their aggression in punishing those who default.

If you're considering walking away from your mortgage, do yourself a favor and speak with a legal professional before you make any rash decisions. What seems good for the short term may hurt you in the long term.

In exploring your options, you may find an alternative solution. Chapter 7 bankruptcy has the ability to discharge debt, providing a clean financial slate.

Those who don't qualify for Chapter 7 may benefit from Chapter 13 bankruptcy, in which debt is restructured to make payments more affordable. While lenders don't care whether you can stay in your house, bankruptcy was designed specifically to help homeowners.

Continue reading "Chicago Bankruptcy Can Help Homebuyers Considering Walking Away From a Mortgage" »

Most Americans admit to being worried about the credit card debt crisis. But when it comes to admitting a personal debt problem, few seem willing to fess up.

Nine out of 10 people polled in a Bankrate.com survey said that debt was not a source of friction in their lives. Yet statistics show that the average U.S. consumer owed approximately $4,200 in 2011. Something isn't adding up.

Time and time again, Chicago bankruptcy attorneys have seen clients fall deeper into debt because they are in denial that they need help. Had they taken action earlier - by filing for Chicago bankruptcy, for instance - they may have been able to stop foreclosure or make eliminating debt much simpler.

Many times it's easy to accept that a friend or neighbor is in debt - but hard to come to terms with the fact that you have a problem. There's also the shame factor. Many folks are too embarrassed to admit that their finances are in sorry shape. But it's important to realize that if you're in debt, you're not alone.

Years of dismal employment rates, dropping real estate prices, and stagnant wages make paying the bills difficult for everyone. Debt may not be entirely your fault. But until you admit you have too much debt, it will be impossible to help alleviate it.

A recent Bankrate.com article looks at the best ways to tell whether you have an issue with debt.

Your Spending Is Out of Line with Income
Is your take-home pay falling while your credit card balance is rising? Whether it's because of reduced hours, a layoff, or rising consumer prices, this is a pattern that can be very hard to correct once it starts. The larger a credit balance gets, the faster it continues to grow. Sure, it's easy to hold out hope for that raise or new position - but there's no guarantee that it will come through. And if it does, your debt may be beyond help at that point. When you can't stop spending more than you're earning, it's time to seek help.

You Never Pay More than the Minimum
When money is tight, it's tempting to make the smallest payment possible. But doing so will cost you a lot in the long run. If you're paying only $25 on a $500 bill, that means you're paying interest on $475 a month - plus the thousands of dollars you may already owe. The problem is that once you make a couple minimum payments, your balance can rise so rapidly that you can't afford to make anything BUT the minimum in the future.

You're Close to Your Credit Limit
Much of your credit score is derived from how much debt you are carrying. Carrying 30% or less of your available limit is ideal. If you are routinely approaching - or surpassing - your limit, it's a sign you have more debt than you can handle. Continuing to do so will only damage your credit score and rack up fees.

You Don't Know Your Balance
Are you in the habit of leaving bills unopened until the due date, or making out a check for the minimum payment without looking at the balance? This is a classic sign of debt denial. Removing yourself from the situation might make you feel better for the time being, but it won't do anything to help your debt. If anything, ignoring the situation only makes things worse.

You're Juggling Bills
Have you ever opened a new line of credit in order to transfer your balance? You may get a lower rate initially, but ultimately you are just shifting debt around. If you find yourself juggling multiple lines of credit, it's a sign that you need to actually lower debt - not just bounce it between cards.

You're Hiding the Evidence
We all deserve a little spending indulgence now and then, and hiding the occasional reasonable purchase from a spouse or family member is somewhat normal. But when it becomes routine, watch out. If you're keeping secrets, it's a sign that something isn't right.

Continue reading "Many Chicago Consumers Living in Denial about Out of Control Credit Card Debt" »

The Occupy movement started strong and faded quickly after police and city officials began taking a stance against protesters and seeking to remove them.

But at the core of the message, the young people who slept in parks, chanted sayings, held signs and sought change wanted a better shot at success. They wanted to live the American dream. This movement didn't come when the country was at its most prosperous, it came years after the Great Recession when unemployment is high, the real estate market is dying and the country is mired in debt.

It's about finances.

Many young people have come out of college with tens of thousands of dollars in debt and they have few job prospects. They can't find work, living expenses are high and life is tough. But bankruptcy in Chicago can help.

Chicago bankruptcy lawyers have been able to help numerous clients who are looking for answers. For many, bills are mounting, income is low and there seems to be few options. Bankruptcy may be a way out.

By filing for bankruptcy, the creditors who have been hounding the consumer are held at bay. They are banned from contacting the filer. Second, once the process goes through, the debt disappears. In some cases, assets may be sold to pay for some of the debt, but not always and there are exemptions.

For young people starting their life off in debt, this may be a helpful tool to get them on track. Credit card debt and other loans can lead to late fees and high interest rates that can cause frustration and prevent them from being successful.

Kiplinger recently wrote a column providing some financial advice to young people who are looking for answers:

Reality check: Rather than naively travel to New York City or Hollywood to seek fame and fortune, do some research. The article suggests that looking at cities that have solid job prospects and a low cost of living is smarter than traveling to a big city hoping to hit it just right. The odds are stacked against the millions of people who think that the big city means big jobs.

Student loan help: There are options to help cut down on student loans, including setting up gradual payments or income-based repayment options on federal loans. There are proposals in Washington to try to expand the options available to students.

Out-of-state tuition is very expensive and while some states provide loopholes to get around that extra cost, it can still be pricey. Some students may be able to avoid major debt by taking their second choice and choosing the in-state option. Choosing public or private or community college for core classes may be smarter and fit the family budget.

Health insurance: With universal health care in the pipeline, most young people should be able to get even basic health care. Some cities and states have high health insurance premiums, while others are more affordable.

The column suggests that most young people should be able to afford basic health insurance for less than $100 per month. Young people with high risks or pre-existing conditions can stay on their parents' insurance until they're 26.

Continue reading "Young Chicago Adults Needing Financial Advice May Consider Bankruptcy in 2012" »

A recent study of 100,000 people found that e-mail address says a lot about a person's credit score. Credit Karma, a service that provides free credit scores, studied its database and found some interesting things regarding the average credit scores based on people's e-mails.

While credit scores aren't determined by which e-mail server you use, they can be affected by many factors. The history of making on-time payments is a big factor, as are whether you have made minimum payments, have lots of debt and other things.

Some people believe that filing for bankruptcy in Chicago will ruin a person's credit score, but the people who need bankruptcy likely are mired in debt and haven't seen that their credit scores are substandard as it is. If a consumer has spent years battling creditors, making minimum payments, dealing with job loss or other factors, it's likely their credit score isn't very good.

The good news is that bankruptcy can restore what is now in bad shape. Chicago bankruptcy lawyers have been able to help many people whose scores were poor because of major debt problems. Bankruptcy laws were designed with consumers in mind. They are to help people get a second chance when they are down on their finances.

According to Credit Karma's poll, Gmail account users seem to have a record of better credit scores than those with Yahoo e-mail accounts. Credit scores range from 501 to 900 and a higher score means the person is more reliable in paying off their debts.

According to the data, BellSouth and Comcast e-mail users had the best credit scores (estimates based on MSNBC's graph):

Yahoo: 641
AOL: 658
Hotmail: 660
MSN: 662
Gmail: 678
Comcast: 686
BellSouth: 695

In a related story, MSNBC found that people in the Midwest have the best credit scores, based on numbers crunched by credit monitoring agency Experian. Eight of the top 10 cities nationwide for highest average credit score are in the plains states.

Wausalu, WI: 789
Minneapolis, MN: 787
Madison, WI: 785
Cedar Rapids, IA: 781
San Francisco, CA: 781
Green Bay, WI: 780
Boston, MA: 779
Peoria, IL: 778
Sioux Falls, ND: 778
La Crosse, WI: 777

The top cities with the lowest average credit scores seem to be spread throughout the south and west:

Harlingen, TX: 686
Jackson, MS: 701
Corpus Christi, TX: 702
Monroe, LA: 706
Shreveport, LA: 706
Augusta, GA: 709
Bakersfield, CA: 709
Las Vegas, NV: 709
Tyler, TX: 710
El Paso, TX: 710

If your credit score is low and you have been battling debt problems for years, consider bankruptcy in Chicago. It may be a way for people who are trying to re-build their credit to shed the debt that has led to their credit problems in the first place.

If you are considering bankruptcy or looking for some help with poor credit or debt issues, consult with a Chicago bankruptcy lawyer for free. A skilled attorney can assess your situation and help you make determinations of the best way to proceed with your finances. Perhaps bankruptcy fits and maybe it won't, but get all the facts before making important decisions.

Continue reading "Consumers With Bad Credit Could Benefit From Chicago Bankruptcy" »

Prolonged periods of financial struggle are taking a toll on the psychological health of many Chicago families - kids included.

A recent Chicago Sun-Times article examines the effects of long-term unemployment and foreclosure on children. Currently, unemployment rate in Chicago is hovering above 9% and more than 138,000 homes in the Chicago metro area have gone into foreclosure since the recession began - that's one in every 27 houses.

While all age groups can suffer from financial distress, studies are showing that uncertainty and stress can affect the behavior of kids in school and, later in their lives, in the workplace. Children may become withdrawn, act out in class or at home, or experience depression. Kids with a father who lost a job were more likely be suspended or expelled from school, while children with low-income mothers out of work were 40% more likely to exhibit problem behavior.

As parents, we can't control the economy for our kids - but we do have some control over how we react to economic changes. Maintaining consistency is key, say experts. A Chicago bankruptcy filing may be able to help.

If you've lost a major source of income or are drowning in debt, Chapter 13 bankruptcy can protect your home from foreclosure and help you get back on track with payments. Shielding your kids from the upheaval of losing a home, finding another place to live, and moving to a new location can go a long way toward making this tough time more manageable. Meanwhile, with the burden of the mortgage out of the way, it will be easier to focus on managing the credit card debt that often makes house payments so difficult.

If you've been out of work for an extended period of time, Chapter 7 bankruptcy may be able to eliminate your debts in entirety - in many cases, while also allowing you to keep assets like your home - so that you can devote more time to finding work and less time battling bill collectors.

In a recent blog post, our Chicago bankruptcy attorneys looked at how bankruptcy can allow enough financial breathing room for the unemployed to take on part-time jobs, which are more readily available, as a stepping stone to full-time employment. Look at it as a fresh start for you and your family.

Meanwhile, an article by the Family Education Network offers up some tips on how to discuss job loss with children.

Be Honest - To an Extent
Often times, uncertainty is even scarier than reality. Be upfront about your job loss. You don't have to give your kids the specific details of your finances, but be open about what changes they can expect. That said, don't speculate out loud about unknowns like foreclosure, which could just leave them more worried. Make sure your kids know that whatever happens, you'll get through it together.

Money Lessons
If your child wants to go to the mall or get the latest electronic gadget, this can be a good opportunity to talk about restraint. You may want to mention that things have changed, and you won't be able to afford everything that was possible before. It's important to stick together, and that means saving money together.

Stick to a Routine
Whether it's sitting down to dinner at the same time every day or enjoying a favorite family activity on the weekend, find ways to spend quality time with your kids. Unemployment is not an ideal situation, but maintaining a routine and making sure your children feel loved will help them hold onto some security when many things around them are changing.

Take Care of Yourself
Alcohol abuse, depression, and domestic violence can be an unfortunate side effect of unemployment and other financial struggles. It's often these issues, not the lack of money, that impact kids most. Take care of yourself so that you can take care of your kids. If you need help, ask. Many counties offer no-cost or low-cost family counseling services.

Continue reading "When Tough Economy Takes Toll on Psychological Health, Chicago Bankruptcy May Help" »

For the countless Chicago families struggling with money, 2012 represents the chance for a fresh start.

There's no doubt that the past few years have been a rough ride. Unemployment in the Chicago area hovered around 10%, while incomes of those fortunate enough to have jobs rose less than 1%, the Chicago Tribune reports. Many folks are stuck with underwater mortgages - i.e., they're making monthly payments greater than the current value of their home. Or, worse, they're already caught up in a lengthy and draining foreclosure process.

When money is tight, it can be easy to feel like you're at the mercy of the economy. But the choices you make this year can change the direction of your financial future, say Chicago bankruptcy lawyers.

Reduce your mortgage payment
That's right: you don't have to settle for a mortgage payment worth more than what's fair. We're entering 2012 with interest rates at historic lows. The Home Affordable Refinance Program is making it possible for a small percentage of buyers to refinance their mortgage terms at a more affordable rate, resulting in savings of potentially hundreds of dollars each month.

Unfortunately, Uncle Sam's rescue plan doesn't work for everyone. What about homeowners who lost their jobs, and have no paycheck to make home payments - even more affordable ones? Or what about those of us who have little to no equity left in our home thanks to sinking home values? A Chapter 13 bankruptcy filing has the ability to stop foreclosure - no matter how many payments you've already missed - and to eliminate unsecured debts like medical and credit card bills so that you can start comfortably making payments again.

Be careful of credit
Credit provides a short-term solution when you're short on cash - unfortunately, it comes with long-term consequences. When the economy and our wallets are hurting, credit card companies know we're looking for a quick solution. That's when they jump in with enticing perks, rewards, and money back guarantees.

But while your card might temporarily keep the bills paid, you'll eventually be trapped with thousands in credit card debt - debt that can threaten your home, your job, and your sanity. Too much debt can mean higher interest rates, garnished wages, and harassment from creditors.

Again, this is where Chicago bankruptcy can offer a solution. Unlike your credit card, bankruptcy can lower or obliterate your debt for good. If you qualify for Chapter 13, you'll be able to keep assets like your home and vehicles while protecting your good name.

Plan for the future
When times are tough it's hard enough to live for the day, let alone imagine what you'll be doing 10 or more years down the road. But life goes on and we have to believe that the economy will get better.

The choices you make today will affect your quality of life tomorrow. If you're not setting aside an amount for retirement in a savings account, a 401k, or an IRA, make 2012 the year you start. Everyone deserves a comfortable retirement. We're not talking extravagant, but wouldn't it be nice to enjoy a few hobbies and vacations in addition to food and electricity? If you're not there yet, it's time to start planning. If you're overwhelmed by credit card bills, an underwater mortgage, or other forms of debt, bankruptcy may be a viable option.

Make this the year you explore all your options, from negotiating with lenders to finding relief through a bankruptcy filing in Chicago.

Continue reading "Tips for Eliminating Debt in 2012 with Help from a Chicago Bankruptcy Filing" »

When some people consider bankruptcy, they think about going through a process where debts are forgiven and the prospect of having to give up some or all of their property and other assets.

But there is a form of bankruptcy in Chicago that could help people who want to keep their homes, cars and other possessions.

Under Chapter 13 bankruptcy in Chicago, consumers are allowed to have some of their debts forgiven. But they must set up a payment plan that typically lasts between three and five years to pay back some of the debt.

Once the plan is completed, the balance of the debt owed is wiped clean. Chicago bankruptcy lawyers have seen many consumers helped by this form of bankruptcy, as they are able to stay in their house and still have their debts cleared. In many cases, Chapter 7 filers can stay in their homes and keep their debts, too. Each case is different.

One major benefit of bankruptcy in Chicago is that filing immediately stops a foreclosure. This is particularly important when considering our current real estate market both in the Chicago metro area and statewide. Prices are down and foreclosures are up and the values of homes have dropped considerably.

Whether you have missed one mortgage payment, five payments or your house is scheduled to be sold at auction immediately, bankruptcy can help. Simply filing for bankruptcy will immediately stop your house from being taken away.

Once you go through the bankruptcy process, you may be able to regain possession of the house after all is said and done. Chapter 13 bankruptcy can be helpful in certain situations, even if you make some mistakes with your mortgage.

Here are some tips from a U.S. News & World Report article that may help you avoid major mistakes with your house:

Check your credit: Not checking your credit can lead to high interest rates or strip you of the chance to get a mortgage at all if your credit score is below standard. Save yourself time and disappointment ahead of time.

Stick to one loan: Avoid taking out another line of credit while seeking a mortgage loan. This, too, can affect your credit score.

Look at the total house payment: Principal, interest, taxes and insurance goes into your payment. Look at all aspects.

Payment history: Make sure you have a history of making payments on time.

Employment history: Job hopping can hinder your mortgage rate.

Preparation is key: Make sure you get pre-approved before you apply so that you know you will qualify for a mortgage loan.

Shop around: Don't just take the first rate you get approved for. Look at different lenders to find the best option for your situation.

Too good to be true?: Get the best rate, but don't chase any deals that seem great.

Lock your rate: Fixed-rate mortgages are important because those that adjust can cause major problems.

Read your loan documents: Take the time to look at closing documents and don't just assume everything works for you. Ask questions.

Continue reading "Chicago Bankruptcy Prevents Foreclosure, Even if You Make Major Mortgage Mistakes" »

As our Chicago bankruptcy lawyers have discussed on our blog many times, Chapter 13 bankruptcy in Chicago has gained popularity in recent years.

This form of bankruptcy allows debtors to pay back a portion of what they owe over a three- to five-year period. It also protects their assets, such as a house or vehicles. Chapter 7 bankruptcy, the most popular form of bankruptcy, doesn't require payments, but assets are put at risk for liquidation.

Because many working-class Americans have found themselves battling debt due to the failing economy, job loss, rising medical costs and other factors, Chapter 13 has become a more attractive option. If they have valuables they want to keep, bankruptcy filers may be more inclined to attempt Chapter 13. Also, if they have a steady income, they may not qualify for Chapter 7.

A recent case out of Missouri, however, shows that while bankruptcy laws are designed to help consumers, there are strict rules that must be followed. And the complexity of the law requires the skills of an experienced lawyer who can help people through the process.

In Johnson v. Fink, a husband and wife filed for Chapter 13 bankruptcy protection in 2009. Based on Social Security income, as well as income from a pension and two jobs, the agreed amount to be paid was $1,890 per month for 60 months.

But about a year after they filed for bankruptcy, the husband lost his second job, which reduced how much he was bringing in to $1,240. After filing paperwork with the court that revealed they had $935 of disposable income, they asked for an amended plan reducing their payment to $100 per month.

But the trustee objected, arguing that the proposed plan didn't include all of their disposable income. The couple argued that based on other cases, their Social Security income shouldn't be considered when calculating their payment plan. The court ruled that the couple hadn't acted in "good faith" in proposing their plan. They asked for a delay in payments in order to appeal the decision, but the judge denied that motion.

They appealed anyway, but an appeals court sided with the bankruptcy judge. In its order, the court found that "when a confirmed plan is modified to reduce payments...due to a substantial change in financial circumstances, the modification must correlate to the change in circumstances."

The good news here is that bankruptcy judges will allow people to modify their payment plans under Chapter 13 bankruptcy. If they lose a job or have a major event happen in their lives, there is an avenue to reduce payments in order to make things manageable.

This is where a skilled lawyer comes in. A Chicago bankruptcy lawyer should be by your side every step of the way in order to help you get rid of the debt. If you are considering bankruptcy and aren't sure which chapter works for you, contact us today.

Continue reading "Johnson, et al. v. Fink Shows How Chapter 13 Bankruptcy in Chicago Could Be Beneficial" »

A recent look at the most recent bankruptcy numbers shows that there was a drop in filings in the Bankruptcy Court for the Northern District of Illinois during the third quarter.

Most analysts believe that this is because creditors have loosened their standards for handing out credit. As you likely have seen in recent weeks, credit card companies have been hammering away with advertisements promising rewards, perks, and cash back deals. All of these scams are designed to entice people to use their cards and end up indebted to them.

While some people may have been able to avoid the credit card companies' efforts, others may have been trapped during the holiday shopping season. For those who have fallen into the trap and may be stuck with thousands in credit card debt, Chapter 7 bankruptcy in Chicago may be a viable option.

Our Chicago bankruptcy lawyers have helped many clients who are burdened with mounds of debt. The different forms of bankruptcy allow people in specific situations to be helped. If you have assets to keep and don't want them to be subjected to creditors, there's a form of bankruptcy for that. If you have little income and few assets, but there are things you want protected, that may be possible. Consulting with a lawyer for free is a good first step.

Let's take a closer look at the numbers.

According to the American Bankruptcy Institute, which tracks bankruptcy filings, trends and numbers, there were 13,750 bankruptcy filings in the Northern District of Illinois between July and September. That's down significantly from the 15,020 filed during the summer quarter, but higher than the second quarter of 2009 and previous years.

To compare how busy that court is compared to the other two bankruptcy courts in Illinois, the Central District reported 2,033 filings and the Southern District only 1,304. Statewide, that makes 17,573 bankruptcy filings. Compared to other states, Illinois ranked fourth highest behind only California, Florida and Georgia.

Most interesting, perhaps, is that Chapter 13 bankruptcy filings became more popular in recent months. Chapter 7 is the most popular form, but made up less than 70 percent of filings for the first time since 2010 and before that, 2008.

Chapter 13 allows people to keep their assets, including a home and vehicles, and set up a payment plan over 3 to 5 years. This can allow people to lose their debt but still keep their assets.

While the numbers are slightly down, our lawyers on a daily basis help countless clients who are struggling with debt and feel like they have nowhere to turn. Filing for bankruptcy is one way that consumers can get relief and get back on their feet. Living with debt can be stressful, frustrating and depressing. That's no way to live.

If you are struggling with debt and have exhausted all remedies you can think of, set up a consultation with our law firm. We have skilled attorneys who are eager to look at your situation and help you determine if bankruptcy in Chicago works for you.

Continue reading "Chicago Bankruptcy Numbers Take a Dip in 3rd Quarter Because of Loose Credit" »

It's a tough time for young adults in this country.

They have dealt with increasing costs for higher education on top of cost-of-living expenses that never go down. They come out of college after earning a degree over four to five years and are thrust into a job market that is the worst in decades.

And so many are becoming adults and starting their lives saddled with debt. Many college students live off credit cards. They get little guidance from their parents or other people of influence who can teach them the dangers of overspending and relying on credit cards, which have high interest rates and hidden fees, especially for people without credit.

One solution to the problem is filing for bankruptcy in Chicago. While bankruptcy can't wipe out college loan debt in most cases, it can eliminate other unsecured debt that is causing students who have only managed to find low-paying jobs to pay the minimum on their cards.

Even if bankruptcy seems like an extreme option, making minimum payments, missing payments and carrying tens of thousands of dollars in debt while fending off creditor calls and wage garnishment threats is no way to live. If you are having debt problems after having just gotten out of college, consult with an experienced Chicago bankruptcy lawyer before making any other decisions.

A recent MSNBC.com article looks at the disparity between young people and older people in America today, concluding that the Great Recession made the gap between old and young much wider than it had been previously.

The recession caused adults older than 65 to enjoy large financial gains, while those under 35 are mired in losses. While it has historically been found that older Americans have more money than younger Americans, the gap has grown in recent years.

Statistical analysis has shown that those 65 or older had a median net worth of $179,494 in 2009, up 42 percent from 1984. In 2009, households headed by those under 35 had a median net worth of just $3,662. That's down 68 percent in the same time period.

The housing market collapse hit younger Americans worse than their older counterparts. Half of people 65 and older who own houses bought them before 1986, which allowed them to ride big gains in home equity during the 1990s. About two out of three have paid off their mortgages.

Younger adults bought into the housing market recently only to see it collapse and then be stuck with high payments on houses that aren't worth what they're paying. Either that or they walked away and took hits on their credit history. They also have little equity in their houses.

The poor job market has also hit younger people hard. Workers under 35 are finding a difficult time finding a job, while older workers have been in the workforce for a long time and are holding on to steady jobs.

Continue reading "Young Adults Hit With Debt in Chicago Harder Compared to Older People" »

Let's face it: Not everyone is good at managing their finances. While many people are victimized by scams, poor investments or even by their own banks or credit card companies, there are those who require help in handling their financial world.

Sometimes, the problem is magnified when a person gets married or becomes involved with another person. Money issues can cause high levels of stress in marriages, especially if they are allowed to linger.

The amount of interest that credit card companies charge their customers for late payments and other things can be astronomical. Credit card balances are one of the leading reasons people consider filing for bankruptcy in Chicago.

Bankruptcy laws were created with consumers in mind, designed to help them overcome bad situations. Being able to get rid of years of debt, through the help of a Chicago bankruptcy lawyer, can be a freeing feeling for those who have seen their credit disappear. The poor economy, job losses and unexpected medical bills haven't helped at all.

The Associated Press recently wrote an article that explains the top-four money mistakes that couples in America tend to make and what can be done to correct the problem. Those in relationships will tell you that communication is critical in order to keep a household running smoothly.

And money issues are among the chief reasons for divorce. The stress of not knowing where the next house payment is going to come from or how to pay for dinner can lead to mental health issues, physical complications and marriage problems.

Here are some tips to avoid money and relationship problems:

Let's put off talking about it
From a relationship standpoint, putting off the inevitable doesn't make things better. Not discussing a key issue like philosophies about spending and saving can lead to a difficult marriage. Major purchases, how bills will be paid, who will be in charge of paying bills and education and retirement savings are things that should be discussed either on a weekly or monthly basis.

So what if there's some cash hidden on the side?
Keeping money secrets is another obvious area of mistrust and a precursor to stress. If each person wants his or her own spending money, spell it out in the budget and talk about it freely.

It wasn't very expensive
This indicates that there is no budget in place and major purchases aren't being discussed and considered in advance. In order to avoid debt problems, an emergency account should be open and active. Do some research and ask for legal help if needed.

I'm not rich enough for a will
Life insurance may not seem to be a big deal when you're young, but you must consider how an unexpected crisis could affect your mate. If a will isn't set up, a former spouse can benefit or the surviving spouse could get hammered with estate taxes.

Continue reading "Top Money Mistakes That Lead Chicago Couples Into Bankruptcy" »

Recently released data suggests that more than 120,000 jobs were added in November, which lowered the unemployment rate to 8.6 percent, CNNMoney reports.

This is certainly encouraging news. Our Chicago bankruptcy lawyers hope that many of the seasonal workers who were hired in retail and by companies producing consumer goods can hang on to those jobs as we get into 2012.

But for many others, jobs have been scarce. Many people have spent months or even years attempting to get a steady income. For millions of Americans, unemployment benefits have been what they live on. But whether a person is newly employed or still struggling to find work, it's likely that credit has been a crutch that is close to breaking.

Without steady income, people have relied on loans and credit cards to get by. This is a disaster waiting to happen. If the consumer has no income, they are likely getting bombarded with calls, e-mails and letters harassing them and making threats against them. If people happen to have a job, they may be in the process of having their wages garnished.

One initial benefit of filing for bankruptcy is that it stops creditors from hounding consumers. Once the paperwork is filed, creditors are no longer allowed to directly contact the borrower as all their communication goes through the court. That can be a load off their shoulders at a difficult time.

The obvious long-term benefit of bankruptcy is the ability to shed debt that has made life extremely difficult. In many cases, all the debt can be vanquished without a person losing their assets. In some cases, they may have to sell some things to pay off their debt and if they file Chapter 13 bankruptcy in Chicago, they can set up a payment plan to pay off debt.

Back to the employment numbers.

The CNNMoney story reports that experts had predicted about 110,000 jobs would be added, so the new numbers surpassed their predictions. Government jobs actually decreased by about 20,000, though private sector jobs were bumped up by about 140,000.

The majority of jobs were added in retail -- 50,000 ---and hospitality, such as hotels and restaurants -- 20,000. An interesting point to the story is that the Labor Department's numbers are adjusted to take into consideration seasonal trends, so the holiday hiring season isn't all to credit for the job growth.

Still, there are 13.3 million people out of work and 43 percent of those people haven't had a job in six months or more. Less than 1/3 of the 8.8 million jobs that have been lost in recent years still haven't been recovered.

Let's hope our country's economy keeps this momentum going into the new year and stock prices, real estate prices and numbers of hires continue to increase. This is a critical time for our nation and our Chicago bankruptcy lawyers hope the recovery continues.

Continue reading "Jobs Up, Unemployment Down, But Chicago Bankruptcy Still a Viable Option " »

A recent survey found that nearly one in two Americans can't make ends meet and pay basic bills in today's economic situation.

Chicago bankruptcy lawyers understand that times are tough right now. The economy has few signs of improvement and, generally, people are struggling to put food on the table and keep a roof over their head.

For a lot of these people, it's the constant threat of credit card companies, their collection agencies and other debts that have caused these problems. The lack of available funds are tied up in making low or minimum payments to credit card companies.

Considering bankruptcy in Chicago can help consumers get out of the problems they have encountered. Many debt problems aren't the fault of the consumer, necessarily.

Job loss could be a function of the economy and surprise medical bills can level a family. Lenders' high interest rates and exorbitant fees on late or missed payments can also contribute and make a bad situation worse.

A recent survey by Wider Opportunities for Women found that 45 percent of Americans live in households that struggle to pay their bills. That amounts to 39 percent of adults and 55 percent of children.

According to a recent Reuters article, the survey found that a family of four with two working adults pays $821 for housing and $707 for food each month. A single worker family pays about $688 for housing and $244 for food.

Those numbers don't account for vacations, hobbies, college and other expenses beyond the essentials. Some are worried that because a committee of lawmakers failed in its efforts to cut down debt by $1.2 trillion over 10 years, there may be cuts in programs that offer financial support. .

The article goes on to say that the poverty rate is $22,314 for a family of four and about 15 percent of Americans are at that level or below. Many more are just above it and require government assistance to get by.

For many of these people, filing for bankruptcy in Chicago would go a long way toward helping. For those who have some income but who are drowning in debt, Chapter 13 bankruptcy in Chicago may be a good option. This allows people to keep their assets and make a payment plan over three to five years to pay back a portion of the debt.

Chapter 7 bankruptcy is the most common form of bankruptcy and is typically for people who have no income and few assets. Their debts are cleared and they are allowed to continue on without making debt payments.

Both forms of bankruptcy can be helpful, depending on the circumstances. If you find yourself making large payments on credit cards or other forms of debt and teetering on financial disaster, bankruptcy may help. Eliminating debt can free up money to help pay other bills, which could help your economic status.

Continue reading "Bankruptcy in Chicago Can Help in Tough Economic Times" »