Chicago Bankruptcy Lawyer Blog

Christmas is still two months away, but it looks like I already got my present. Call me practical, but I asked Santa for lower gas prices this year. And he delivered early; since summer ended, fuel has dropped more than a dollar per gallon across most of the U.S.

OK, so I know it won’t last forever. In our country, cars are held way to sacred for that. Yes, demand dropped a bit during the most recent wave of financial freak-outs (as should be expected), but unless we find a substitute for oil stat, prices will work their way back up—especially once the major holiday travel season gets underway.

However, that doesn’t mean we can’t take advantage of the savings while they last. If you commute to work by car, sliding pump prices add up. Say you fill up your 20-gallon tank once a week. Just last month—with gas averaging about $4 a gallon (more in some places, but I’m trying to keep things simple)—you would have paid $80 a week. That’s $320 every month! This week, most gas stations were charging under $3. Do the math and you get a savings of at least $80 a month. That’s like a free tank of gas every fourth week!

It’s small enough to go unnoticed if you let it, but certainly not insignificant. Don’t let those 80 extra bucks burn a hole in your wallet! What you do with it is up to you, but make it count. For example, you can:

Save it
Park that money in your savings account. If gas prices hadn’t declined, you would have made do without it anyway, right? It’s like free money—pretend you found it on the street, if that helps. You can leave it here in your savings as emergency funds, or you can make it part of a long-term savings plan, like a retirement account or a (carefully planned) stock market investment. Better yet, use it to start paying down debt. You can contact a DebtStoppers attorney to get started with a free debt analysis. Getting out of debt will put you in a better position to save for the important stuff—like a house, your kids’ college education and retirement—with every paycheck, not just at the mercy of the oil companies.

Spend it…on others
Save yourself some stress this holiday season, and put the extra cash towards Christmas gifts for family and friends. With the economy in a downward spiral, this might not be the year to go all out—but budgeting doesn’t mean giving up style. Know what everyone wants? Scour eBay for the same stuff at discounts you can’t find in stores. If you’re a whiz in the kitchen, do your shopping at the grocery store and hand out batches of homemade cookies or invite the family over for a holiday meal. Are you artsy? Maybe stock up on some craft supplies and go the homemade route. Just because the old adage sounds clichéd, doesn’t mean it’s not true: it really is the thought that counts. This also happens to be a particularly good lesson for the kids.

Treat yourself
Yes, by now you know you shouldn’t blow all your money on yourself. But deprivation ruins a savings plan the way it ruins a diet—by piling on too much pressure. You deserve a treat now and then. And if cheaper gas prices mean you can buy your favorite mochas once a week or get that hot new outfit you’ve been eyeing for your work’s holiday party? Then go for it—as long as it doesn’t become a habit. In moderation, splurging relieves stress and helps you stay on track. And that’s enough to put me in the holiday spirit.

Last week was a very interesting one on Capitol Hill. The former Federal Reserve Bank Chairman, Alan Greenspan was in the hot seat, being grilled (slowly, and over an open flame) by a Congressional Oversight Committee on the economy and the role he played in the credit crisis. I still get a chuckle out of his comments that “we are in the midst of a once-in-a-lifetime credit tsunami,” and that he was “shocked” about the outcome, insisting that "I still do not understand exactly how it happened."

Guess what? As it turns out, I realize now that I am way smarter than Alan Greenspan. Really, no fooling. I predicted this mess was going to happen, sooner than later. Not that I did anything about it, of course. I mean, what do I know? If no one else was worried, why should I be? I’m not an economist, after all.

And another thing, not only am I smarter, but I’m a bigger man (figuratively speaking, of course) -- I accept my share of the blame in this economic debacle. My bad. I couldn’t help myself. I’m only human.

The temptation was just too much for me. Sure, deep down in my heart, I knew that I didn’t need any more debt – I was okay with my house, the one car and the few credit cards in my wallet. But the advertisements and the marketing was just so compelling? With the interest rates at an all time low, and the loose terms were so darn attractive, how could I (or anyone else, for that matter) pass them up?

It’s like this: If you put a kid in a candy store and tell him he can take as much as he wants, and all he’s got to pay you is a nickel a day for the next month, is he going to ask himself, “Do I really need this candy?” or “Where am I gonna get a nickel a day from every day?” Heck no. He’s gonna cram that candy into every pocket that he can, till they’re overflowing. He’s going to shove that candy down his own throat until he’s sick. He may or may not worry about where he’s going to get that nickel from to pay you back tomorrow (and the next day and the next day). But for now, he’s gonna enjoy that candy.

It’s basically the same thing with the economy, which is driven largely by consumer spending. We were tempted (not by the devil, but close -- it’s called a bank) and we gave in to that temptation. It’s as simple as that. I have to admit, I loved the bigger house, the second car and the freedom to purchase whatever I wanted with all of that credit. It was nice while it lasted.

But now, like the kid rolling on the floor clutching his aching stomach, we’re paying the price for our overindulgence. That price is too much debt, and that’s really a pretty significant cost. The real problem is a spoonful of Pepto Bismol isn’t going to cure this ache. Like too much candy, too much debt has a way of putting a serious hurt on you. If you want to show us where it hurts, then contact us, and make an appointment with a DebtStoppers attorney, and we’ll help make the pain go away for good.

My husband and kids go nuts when it comes to the popular board game, Monopoly. To the point where they’ve played games that last for days, and even in one case, for years because they only played on New Year’s Day against a certain group of people. It can get crazy for someone like me who can’t stand the game; and this from a woman who spent most of her life as a real live banker. Sorry, with all due respect to Parker Brothers, but I hate it. Still, I’m an enabler – I even went so far as to buy the Franklin Mint version complete with silver houses and gold hotels about two decades ago which cost me $500 (paid for in 20 easy monthly installments!). It sells for less than that now on eBay, if you’re interested.

As I watched the umpteenth competition this past weekend, two things struck me. One, the housing prices are constant – they haven’t gone up or down since the game was patented in 1935… how’s that for stability! Second, I have a real issue with the yellow Community Chest card which reads, “Bank error in your favor. Collect $200.”

Can you imagine coming home, collecting your mail and finding that the bank deposited $200 into your checking account by mistake? Ka ching! I’ve got plenty of things I could buy or pay down with that $200. But, do I dare spend it? Much as it pains me to say this, no. They’ll figure out that I have it sooner or later, I’m sure. Bankers have a phrase for bank errors; they call it “unjust enrichment” or an “overcredit.” It’s been known to happen; banks are not infallible. Scratch that, they are infallible, but they’re not stupid. Um, scratch that, too. Let’s just say it could happen. But it’s generally not going to have a happy ending, not like you think, anyway.

Let me tell you what’s going to happen. A month or so after the bank realizes its mistake they will simply debit the money from your account. Now, whether or not they alert you to that is anyone’s guess. So, here you are, blithely spending your windfall. Finder’s keepers and all that, right? Then, you come home one day to find a little computer printed notice from your bank, that your checking account is overdrawn. Naturally, you panic… how could that be? You run a tight ship; you’ve got everything budgeted for, right down to the newspaper carrier’s tip (likely a thank you for not breaking your window, as opposed to getting the newspaper to you on time).

But, now you’re in the red. Checks are bouncing left and right because the bank took back their money. You not only have less money than you thought, you have significantly less money than you thought, when you add in the returned check fees – which can go for $35 a pop. Worse still did you know that the bank can charge you with theft? How’s that for compounding an error?

The bottom line is this: Review your bank account statements very carefully. Errors can go either way, sometimes in your favor but more often, not. As soon as you’re aware of a mistake, you should contact the bank immediately. Some mistakes occur at the ATM; say you withdraw $100 but the bank shows $200 on the statement, or you ask for $100 but only $60 spits out of the slot. You need to bring this to the attention of the bank as soon as you notice, because ATM transactions can only be disputed within 60 days of the transaction date.

They will likely need a few days to confirm the error, but it will eventually get sorted out. In the meantime, if the error is not in your favor, say because the bank debited the same check twice or for more than the check was written for, be sure that the bank does not return any other checks. They can give you provisional credit of the amount while it’s being investigated.

One thing to keep in mind is that the bank wields the sword; at pretty much any time – even years later – you may notice that they have debited your account for the ill gotten gains. “Bank error in your favor.” I wish.

--Debt Diva

It looks like the growing army of foreclosed homes up and down Main Street U.S.A. may have finally caught the eye of Uncle Sam. This week, the government announced it’s working on a way for some of that $700 billion rescue plan to actually help homeowners, not just bankers.

It’s about time. With home prices spiraling downward, no bottom clearly in sight, many property owners are finding out their home is worth less than the mortgage they still owe. They’re caught in the middle: can’t afford to sell the house, can’t afford to keep the house. Their only chance is to negotiate a new, more affordable mortgage.

But people have still been losing homes left and right simply because lenders don’t want to wait for their money. Amid a sea of defaulted loans, banks are desperate. They want their money now, and if that means kicking you out of your house so they can slap a “for sale” sign up in front of it? Then tough luck. Until now, anyway. It seems the Feds are finally seeing the light: it’s the lenders that got us into this so-called financial crisis when they handed out “no money down” mortgages like candy. So the lenders have an obligation to help us out.

Here’s how the plan will work. If the FDIC and Treasury have it their way, some of that bailout money will serve as the carrot to encourage lenders to work with homeowners. They’ll (hopefully) be inspired to modify current loans into more affordable versions with more realistic deadlines. If a buyer defaults on the new mortgage, the lender will still get paid. If all goes well, the deal could cut the average homeowner’s mortgage payments by nearly $400, according to CNN.com. Of course, so far lenders won’t be required to negotiate with buyers, so there’s still a chance they could balk. But at least there will be a financial incentive.

So what can you do to take advantage of this potential government lifeboat? Start by getting your finances in order today. With the free one-on-one debt analysis DebtStoppers is offering, you can learn how to reorganize your debt so you can start saving. That way, even if Uncle Sam ends up changing his mind, you’ll still have a shot at the American dream—whether that’s keeping the home you already own, or making the dream of buying one a reality.

A friend revealed a secret to me the other day. Money has been tight for her family, (especially since her husband lost his job a few months back) but she told me that she’d found a way to save cash. Curious, I asked how. Turns out she canceled their health insurance and has been keeping her fingers crossed that no one in the family will need to go to the doctor.

Wow, that seems like a pretty risky gamble to me. But apparently, she’s not the only one taking it. One in six Americans does not have health insurance, according to a recent study by the Center for Disease Control and Prevention. And I’ve since discovered a few acquaintances have done the same thing. Many are self-employed or work part-time at one or two jobs, so they don’t qualify for benefits. But some have opted out of good employer plans simply because, right now, they’d prefer a fuller paycheck.

If you could guarantee, 100% without a doubt, that you will never get sick, cutting out health insurance might be a smart move. But, unfortunately, none of us can do that. That’s why it’s called insurance. Sure, you might save a few thousand bucks a year – and that’s no small change, I know – but throw in a doctor’s visit and meds for something as common (yet serious) as strep throat, a bad flu, or your child’s ear infection, and you’ll end up paying anyway. And just one stay in the ER (did I mention my friend has a 6-year-old kid? Come on, how many kids break their arm or require stitches at some point?) and you’ll be paying off hospital bills for life.

Whether you’ve been laid off, are between jobs, or just can’t afford your monthly health insurance bill, you still have options. Your employer is required to offer short-term (and usually pretty pricey) insurance called COBRA. Use it temporarily between jobs, or while you compare individual health plans (ehealthinsurance.com is a helpful website) and settle on one that you can budget for. If you can’t afford insurance, period, look into government help like Medicaid to see if you qualify. Whatever you do, don’t just assume you won’t need to go to the doctor.

Of course it’s good to save money. But what good is money if you’re too sick to spend it? Unlike house or car bills, your insurance payments can keep you alive. Take care of your well-being before all else. Then, learn how to organize your finances so you don’t ever have to short change yourself. Until the guys in Washington figure out how get us all the health care we deserve, we’re stuck paying sky-high premiums. Start a plan to budget for them.

You know how you should get an annual checkup to make sure you're in good physical health? Well, with the free debt analysis DebtStoppers is currently offering,now is the perfect time to get a checkup for your financial health. You shouldn’t have to compromise your health to pay the bills. You deserve to have a healthy body, mind and pocketbook.

You’ve probably heard the saying that the real estate market is cyclical. There’s a lot of truth to that – property values rise and fall like the tides, though not quite so frequently, fortunately. Right now, the real estate market is in a nose dive and there is no end in sight. That’s unfortunate for homeowners who are already “upside down” or “under water” or whatever may be the catchword of the moment. It simply means that your property is valued for less than the total outstanding debt that you owe on your mortgage.

It may be construed as bittersweet, but those low property values are ideal property values for the first time home buyer. Experts are estimating that property values will continue to decline over the next year or two, and could drop an additional 10% to even 20%. Now, and in the next few years, it will be the so-called “buyer’s market.” Prices will be low and are expected to get lower still. Interest rates for mortgage loans are currently in favor of the homeowner, and should stay that way for a while. And there will be an abundance of homes available in every price range and every style you could possibly imagine. A glut of available homes, either through conventional sales or foreclosures, would not be an understatement.

No doubt, we’ve seen the backside of the illusory home buying mortgage schemes of the past several years. What do I mean? You probably can remember the ads – “Own your own home! No money down! 2% Adjustable Rate Mortgage” – good riddance to bad rubbish, I say. That’s what got us in this mess in the first place. No, I’m talking about “real” home ownership, like that of a generation ago, the kind that came with a sizeable down payment.

If I were a first time home buyer, I’d be wringing my hands together in anticipation of unlocking the door to my new home. It’s still the American dream to own your own home, after all. To paraphrase a famous line from Gone With the Wind, “tis the only thing in the world worth workin’ for, worth fightin’ for…” Now, I’m not saying, “dying for” cause there’s really very few things worth my life, but work and fight for, absolutely. A home is definitely worth that.

And that leads me to this point: You do have to work for, and maybe even to fight for it, if a home is really what you want. If it is, then now is the time to start training, because it isn’t necessarily going to be easy. Especially if you’re in the same boat as the majority of other people in this country, which means that you’re currently living beyond your means.

Now is when you have to take a good hard, honest, look at your debt and find a way to organize it, so that you can save towards your goal. With completion of our free one-on-one debt analysis, DebtStoppers attorneys can help you find a way out of your debt and, perhaps give you enough breathing room in your budget to actually allow you to save some money to be put towards a down payment on your home. Just like home ownership of old (i.e. less than a decade ago), from the day you move into your home, you’ll have equity in it.

--Debt Diva

Stock prices have recently taken a nose dive, straight from 35,000 feet above sea level. Individuals with heavy investments in the equity market, or 401K plans loaded with stock have suffered a tremendous loss. For too many people, their entire life savings is now basically a fraction of what it was only a few months ago, in some cases, only 60 to 70% of what it once was. Some people were completely wiped out of their retirement savings, thanks to the bankruptcies and home foreclosures that occurred, due in large part to poor policy of the federal authorities and bad management by the investment banks, coupled with simple greed and even simpler ignorance of the “exotic” assets acquired by these investment banks. It’s like getting your kid a hedgehog and not understanding that they carry rabies and can cause ringworm.

Yes, stock prices have taken a big hit. But, if you’re lucky enough to have some discretionary income, it’s a great time to buy! Notice, though, that I said “discretionary income.” That means no unsecured debt, such as credit cards, store charge accounts, payday loans or rent to own contracts. There’s bad debt and there’s good debt. The bad debt is the unsecured kind; the good debt is the secured kind that gives you a nice tax break, like the interest you pay on your conventional mortgages and home equity loans. Discretionary implies that your income isn’t needed to buy groceries, pay utilities, or put gasoline in the car. Discretionary means that its “extra,” not money earmarked for anything else.

You will hear a lot of people telling you that now is the time to buy stocks; you’ve heard the adage, “buy low, sell high.” Hmmm. It’s “supposed” to work that way, in theory. Most of the time, it does. Though the past few weeks have certainly bucked the trend; people are anxious to be rid of their stocks now, before it gets worse. They’ve already taken a tremendous loss, if they’ve got stocks, they should hold onto them and wait for the tide to change.

But the truth is that those people telling you to buy stocks are usually stock brokers or equity traders, and even some unscrupulous financial advisers who should be giving you sound financial advice. They’re telling you to buy stocks because, whether or not it’s a bull or bear market -- they will still make money on your equity trade. They’re not there to tell you that in the long run, you will be better off using your income to pay down your 22.9% interest rate bearing credit card, or your 8% car loan or your 6¼% mortgage loan.

There’s no money in it for them, if you do the right thing, the prudent thing. They don’t care how much debt you’ve got, what matters to them is how much stock you buy or sell. These guys are generally commission based, don’t you know.

So, say you listen to your stock broker, and he’s pushing the buy low, sell high line for all its worth. And you go for it. You take $100 that you might normally use to pay extra on your credit card bills, and you buy 20 shares of some stock at $5 a share. Great! A year from now, with maybe a nice ROI (return on your investment), you’re gonna have a nice little nest egg. What a deal! Bear in mind, though, that your stock broker is in business to make money, whether you are losing yours or gaining it.

But let me tell you something that your stock broker won’t tell you: if your return on investment is less than the interest you’re paying on your credit card, or your car loan or even your home mortgage, you are making a major mistake. Even assuming you can get a 10% return on your investment your credit card interest rate is higher than that, maybe even as much as 30 or 40%. So, you better go pull out your crystal ball and pick a real winner. At the end of a year, while you may have a couple of shares of stock in your portfolio, you will still be in the same bad debt position. Isn’t your debt the reason you’ve come here to this website and blog, after all, because you were looking for advice about your burgeoning debt? If it is why you’re here, then you’ve come to the right place because DebtStoppers attorneys can give you the help you really need.

Looking for stock advice? Here’s some – buy and hold. One of the most famous of all stock market investors, Warren Buffett, a man who may know a thing or two about investing, says his favorite holding period is “forever.” But invest only with money you won’t need for at least the next 5 years. The smartest investment we can all make right now is an investment in ourselves and in our future. How do we make that investment? By getting out of debt now!

It’s not a daunting task. Find out exactly where you stand. Make an appointment at a DebtStoppers location near you and take advantage of the free DebtStoppers Personal Debt Analysis.

-- Debt Diva

What’s your favorite day of the week? I bet my paycheck (theoretically, of course – I’ve got bills to pay) that it’s payday.

Legend has it that if you listen real carefully on Friday afternoons, you can hear the collective sigh of relief from a nation of people who made it one more pay period to put a check in the bank. One more month they can pay the mortgage. One more month they will still have a car, electricity, food. Ah, but once the bills are paid, the fun begins all over again. It’s the never-ending story.

Nearly half of Americans are living paycheck to paycheck, according to a survey by Careerbuilder.com last month – which makes getting out of debt seem all the more impossible.

Twenty-five percent of workers don’t set aside any money at all for savings. And for those who do, it’s not much. Thirty-four percent save $100 or less and, for 18 percent, it’s less than $50. Most workers need an extra $500 a month to live comfortably. And the chance of getting a hefty raise like that in today’s economy? Ha, not likely! For most of us, just holding onto our job (or jobs) is hard enough.

You know what I think the saddest part is? Well, maybe it’s more laughable than sad. About one-fifth of people who make over $100,000 said they still couldn’t sock any away for a rainy day! What’s their excuse? If the rich are falling apart, what are us regular folks supposed to do?

Well, I’ve said it before and I’ll say it again. Take solace in knowing you’re not alone. You can see the statistics staring you in the face every time you flip on the TV or the computer. We are one nation, under God, in debt. So why not use the numbers to your advantage? They say power comes in numbers – so does comfort.

Support groups have long been helpful for alcoholics, cancer patients and people suffering through similar experiences or dilemmas. Debt is just as stressful and life-damaging. Consider joining forces with family, friends, neighbors and online forums (though be wary of online scams). You’ve already taken a big step just by checking out this blog.

While you’re at it, who better to network with than a financial professional? Did you know that every month you have the chance to meet one-on-one with a debt relief attorney, ask questions to your heart’s desire, learn how to stop foreclosure and get dinner, all for free? It’s called the DebtStoppers Community Workshop. Each month, DebtStoppers hosts a free evening of fun, food and financial empowerment.

And, as if there’s anything better than saying goodbye to debt, participants have the chance to win a Dell laptop. So what are you waiting for? Sign up for an upcoming workshop on Oct. 29 in Chicago or Nov. 19 in Atlanta. Can’t make it? Contact a DebtStoppers attorney today.

Between the state of the economy and the upcoming holidays, I expect that stress levels will start peaking any time now. Perhaps you’ve got a mountain of bills and mortgage payments to be paid, and not enough money to take care of them. Add in the pressure of holiday gift buying and you’re probably ready to crack.

Now, there’s been a lot of talk lately about cutting back, tightening our belts and understanding the difference between what you need and what you want. Needs are defined as the things that you must have in order to exist – food, water, clothing, shelter, health care, transportation. Wants are defined as superfluous – things that you can live with or without. I say nertz to that! What’s the point in living if I can’t have, do or enjoy some of the things I want but don’t really need? Should I go without my Diet Coke in the middle of a hot day, just because it costs a buck and I’m supposed to use that dollar to pay down my credit card debt? Miss out on what’s going on with Brad, Angelina or Britney, just because People magazine is on my “desires” list? No way!

The truth is, denying all of your needs to save a few dollars is the surest way to totally bust your budget bubble. Consider the person on a diet, trying to lose a few pounds in a short period of time. They avoid all sugar or carbs or proteins by signing up for the diet du jour. After about five days of that, their body is absolutely craving some candy, bread or steak. Instead of indulging, once in a while, in a single miniature Snickers bar, a Dunkin Munchkin or a plain McDonald’s hamburger, they’re pigging out on a pint of Ben & Jerry’s Cherry Garcia, or a dozen Krispy Kremes or a double Whopper with cheese. Diet sabotaged, merely because they couldn’t withstand the craving.

It’s the same thing with your financial diet. If you don’t indulge your cravings a little bit, now and again, you will sabotage your long term plans and goals. Even the experts acknowledge that a budget has to allow for some pleasures – entertainment, eating out, fun. The trick is to allocate a specific amount for joy; it doesn’t take much, a mere 5% or so of your budget is enough to keep you sane. Yes, your budget is strapped already, but if you don’t make room in it for you and your mental well being, you’re going to go postal!

Make the most of your entertainment allocation. Choose the activity or indulgence that means the most to you; the one that rejuvenates you, gets you back to your happy place. It doesn’t matter if it’s going to a sporting event, a night on the town, eating out, a good haircut or a foot massage. Necessities? Absolutely.

But, if your debt worries have reached the point beyond which a chocolate truffle or a glass of wine can help then you may need to take it to the next level. If you need to talk to someone about your debt, and how to get out of it, DebtStoppers attorneys are here to help. Just consider us an investment in your sanity.

--Debt Diva

You know the economic crisis is endangering your finances – but could it be threatening your health?

Think that sounds a bit far-fetched? Plenty of doctors don’t think so. Physicians across the country say they are treating a growing number of patients for severe stress. Apparently, while the big boys on Wall Street have been busy snatching up their billions in bailout dollars, the muddy water they’ve landed the rest of us (and maybe even our global neighbors) in is spurring an alarming increase in anxiety.

In a study by the American Psychological Association last week, 80% of participants say the economy is a significant source of stress. That’s up from 66% in April! Women seem to be bearing the brunt of the worries, as more females than men report being stressed by money, housing costs, job stability and the economy.

Doctors say stress can exacerbate pre-existing medical conditions and, at its most extreme, can even result in domestic violence or suicide. For most of us (fortunately) the effects are more subtle—yet dangerous enough to be taken seriously. Over time, chronic worry can lead to physical symptoms like insomnia, high blood pressure and heart disease and psychological ailments like depression.

It’s a trend statisticians have known about for years—illness rates go up when the economy turns down. And this is the biggest downturn since the Great Depression. People are losing it all – their homes, jobs, cars, not to mention their pride and hope.

But don’t buy into the doom-and-gloom, nothing-we-can-do mentality on the news, say the psychologists in the APA study. Instead, it’s best to confront the cause of your stress head-on. As my mom (eternal optimist that she was) used to tell me, when you’ve hit rock bottom, there’s nowhere to go but up.

Of course, if you feel unbearably overwhelmed or depressed by debt, don’t hesitate to seek help. Talk to a counselor, talk to your family, talk to your friends and neighbors—you might be surprised at how many are going through the same thing. Then, do something about it.

Remember, bailouts aren’t just a luxury of Wall Street (though Uncle Sam sure makes it feel that way). You have a constitutional right to declare bankruptcy. You have the option to intervene when the bank threatens to take your home. DebtStoppers is on your side with real-life solutions. Contact one of our attorneys to find out how.

Despite all of the dire economic news we’ve been encountering over the past several months, I’m not worried that it will continue. I believe that we have a strong and positive future. Am I am psychic? No. Though my kids are convinced I am. I am certain things will be better for me, and perhaps for you, too, in the next couple of decades.

In the year 2037, government grants will be free flowing once again. And the tight liquidity markets will be a thing of the past. I know all this because I will be the recipient of a couple of federally approved grants, several $7,500 credit lines from Centennial Platinum and three auto loans. Already approved. Guaranteed. I’ll also be able to have the fling of my life, if I want. Of course, by 2037, I’ll be in my late 70’s, so who knows if I’ll be able (or even be around!) to enjoy all that. So says the letters in my email box. Spam has its place, does it not? At least, it’s good for a laugh.

But, what does the future really hold? Well, I can’t predict with any certainty the future 30 years hence. But I can tell you that, over the next 5-10 years, it is going to be much tougher all around, for all of us, regardless of where in the country you live.

It’s the same old song all over the country. Some of us just don’t have or earn enough money to pay for the massive consumer debt we’re carrying. Some of us are (justifiably) upset that our pension and retirement accounts have lost significant value and our golden years aren’t looking so golden any longer. Some of us are concerned that we owe more on our mortgages than our property is worth, and we’re afraid that we’re about to lose our home to foreclosure. Some of us have suffered a job loss, or are working two or even three jobs to (almost) make ends meet. Still others are stuck with a job that we hate, but not so much that we’d even consider quitting. Not in this economy, at least. We wouldn’t dare voluntarily leave a job.

But, you know what? You’re already working to make things better for yourself and your family. You’ve come here to this website looking for answers and for help. While we can’t solve all of your financial and economic problems, we can help with one or two. We can help you avoid foreclosure and keep your home and we can help you manage your outstanding debt.

Poorly written economic policies, lack of fiscal oversight and general mismanagement (I could go on, but I’m sure you get the gist of it) by the federal government and its agencies have put you into this bad place. But, a federal law is going to help you get out of this. Bankruptcy is a constitutional right (U.S. Constitution, Section 8, Powers of Congress), and you have the right to exercise it. It’s also the right decision. The federal government is helping out the big boys with billion dollar bailouts and loan guarantees – bailouts and guarantees for the same institutions that put you in this precarious position. It’s time for Uncle Sam to cut you the same slack. Exercise your constitutional right. A DebtStoppers attorney can show you how.

--Debt Diva

So it’s official. The U.S. government’s big $700 billion financial bailout plan – the largest in history – is underway (though, so far, it hasn’t had much effect). It’s Uncle Sam to the rescue…hopefully. But what about the damage that’s already been done to the public, to us little guys? I’m talking psychological, not just financial. I think most of us American citizens are still pretty rattled by the financial meltdown we watched unfold last month.

If daily doom-and-gloom news reports about the latest national bank to shut its doors have got you on edge (I know I had a minor panic attack when I discovered my own bank – Wachovia – would be sold) you’re not alone, believe me. In the past few weeks, DebtStoppers has received hundreds of calls from people wondering what they need to do to make it through this scary mess.

So what exactly can you do? Maybe the best course of action you can take right now is to look inward. Focus on yourself instead of the big picture. Look at it this way – what happens on Wall Street is out of your control, but you can achieve some peace of mind knowing you have command of your own family’s personal finances. And that starts with getting out of debt as fast as possible. With credit card companies raising rates higher than ever, there’s no better time than the present to make a financial plan and resolve to stick with it.

Paying off a large debt can seem daunting, but it really is doable – especially if you take it step-by-step. This probably sounds obvious, but before you can get out of debt, you first have to stop incurring it. Maybe this means only using credit cards when you know you can pay off the balance in full each month. Personally, I’ve taken it a step further and cut up all but two of my cards (which I try to reserve for emergency use only).

Another strategy you might want to consider is using a debit card. As with cash, you’ll be paying directly out of your account instead of racking up credit. But with debit, your bank will provide you with a record of your expenditures each month. Tracking purchases this way makes it a lot easier to keep tabs on how much you’re spending. If there is any upside to these tough times, it’s that it is easier than ever to get into the habit of cutting back on purchases. I know I’ve been giving in to temptation a lot less lately (when a growing portion of your paycheck is going to gas and groceries – and you’re not sure how long those paychecks are going to keep coming – all of a sudden dropping a chunk of change on new shoes or dinner out seems surprisingly less appealing).

Next you’ll need a plan to tackle that remaining debt. Start by getting a copy of your credit report and analyzing your current situation. Take an honest look at your current credit card balances, loans, medical bills and anywhere else you carry debt. From there, you can prioritize. Which of your credit lines has the highest interest rate? It might be good to pay that one off first. Consider all your options. For example, should you switch all your debts to the card with the lowest rate?

Find it all a bit overwhelming? If you need help along the way, DebtStoppers offers a free one-on-one debt analysis to help you figure out where you stand. Contact us to find out about your options.

Just think of the benefits of lifting your debt burden. No more living paycheck to paycheck or stressing about whether you can make your bill payments this month. No more feeling completely helpless when you see the latest financial wreck on TV. And not only will stabilizing your financial situation now help you weather today’s economic storm, but it will ensure that when the economy does eventually pick up, you’ll be way ahead of the game.

I really hoped you cashed that economic stimulus check you got back from Uncle Sam in the beginning of this past summer. If you haven’t done so already, you better get that sucker deposited in the bank before the government runs out of money and the check bounces. Just kidding. I think.

But seriously, while we’re on the subject, you still have time to get your economic stimulus payment this year. The IRS, working with the AARP, stated that approximately 4.35 million Americans haven’t claimed their stimulus checks, because they didn’t file a 2007 federal tax return. In Illinois, which is among the top 10 states in the U.S. who haven’t filed, more than 150,000 residents are in danger of losing their stimulus check. That’s $46 million in total going unclaimed or $300 for each individual. I don’t know about you, but I sure could use $46 million. In truth, I sure could use $300. And that $300 is the minimum amount you could be eligible for, it could go as high as $600 per individual, or $1,200 for a couple.

What’s really sad about this is that the majority of those who may be eligible for the stimulus payment are the ones who need it most, including low-income seniors, disabled war veterans and military families.

Compounding the problem is that many non-filers have heard a rumor that they would have to pay taxes on the stimulus check. So, why bother filing for it, right? Of course it “sounds” darn plausible; the IRS pretty much does tax every one and every thing, right? But in this case, it’s an outright lie. That money is tax-free.

The IRS says that you must file your federal tax return before October 15, 2008 to be eligible. That’s if you’re eligible for the check. Are you? If you’ve got a valid social security number, and had $3,000 in qualifying income during 2007, and by qualifying income, the IRS means any earned income, or specific benefits from the Social Security Administration, Railroad Retirement or Veterans Affairs.

A lot of individuals don’t like to file a tax return (even if they’re getting money back!) because the forms are too complicated. In this case, it’s easier than it looks; you only need to file the 1040A form, and complete a few lines of information. AARP makes it even easier, with an online form that you can complete, print, sign and mail.

In this economy, which is getting worse, it seems, every single day, even an amount as paltry as $300 can and will help. Winter is coming, and so are the holidays, and everyone is looking for a little extra something to tide them along. Don’t let the federal government keep the money that rightly belongs to you. They’re just gonna do something stupid with it like give it to some Wall Street banker who didn’t have enough money to get his Prada suit dry cleaned, or had to wash his Lamborghini by hand instead of having it detailed. What could you do with it? How about buy groceries, put gas in the car, pay off a credit card bill, or go out to dinner? It’s your choice and it’s your money – use it or lose it.

DebtStoppers is not just about helping you get your debt under control. We’re also about helping you get what you’re entitled to.

--Debt Diva

This week we were forced (yet again) to watch, hear and read about the $700 billion bailout package presented before the U.S. Congress… first the House of Representatives, then to the Senate and next back to the House. Apparently there is no other financial news anywhere else in the world.

It’s getting kind of tiresome for the average Joe, who pretty much understands that there’s very little in that huge bailout package for him. No golden parachutes, not even enough gold to make a hankie, if you get right down to it. Joe is in a financial pickle – he’s worried about his financial future, whether or not he’ll keep his job or find one, worried about how he’s going to pay his bills and put food on the table, worried whether or not he’ll still have a roof over his head in the next few months.

The rescue plan helps Wall Street lenders and financiers put their financial houses in order. The very people who got us into this mess to begin with. It doesn’t do anything at all to stop the degradation of the U.S. housing market. And it certainly doesn’t help average Joe keep his own house. Joe’s going to have a rude awakening from his American dream.

Home ownership is the dream of every red-blooded American, and about 66% of Americans do own their own home. For now. But the U.S. housing market is tanking big time. Housing starts haven’t been this low in almost 25 years, and vacant houses are at the highest level ever, at least since the government started keeping records almost 50 years ago. Millions of American homeowners are underwater or upside down or whatever terminology you use – in simple language, they owe more on their mortgage than their house is worth, and property values and home prices continue to fall. Foreclosure rates are accelerating at an unprecedented rate; according to the New York Times, nearly 6 million Americans will default on their mortgages within the next 15 months.

It’s clear (to me, at least, but not, apparently, the Federal government) that homeowners need urgent help. For the U.S. housing sector to be saved from prolonged deterioration and eventual collapse, the bailout package should address issues such as renegotiation of mortgage terms for distressed homeowners.

Banks are “afraid” to lend to each other. Isn’t that frightening? If they won’t lend to each other, they’re certainly not going to be willing to lend to average Joe? They’re not even willing to renegotiate your existing loan with you.

A new government program instituted last week is supposed to help something like 400,000 homeowners to keep their homes. Wow! Four hundred thousand. Six million homeowners are in danger of defaulting. That’s less than 7% of homeowners. What happens to the other 93%?

Okay, so that would be good news for a few chosen homeowners if the banks were willing to take part. You see, the program requires the banks to voluntarily refinance the defaulting mortgage, by reducing the loan balance to 90% of the property’s value. The key words here are “voluntarily refinance.” Banks don’t “voluntarily” do anything which would reduce their profit margins. According to banking sector officials, they are doing “other” things to help homeowners, like lowering their interest rates or lengthening the terms. Sure they are. The fact is it’s easier for them to foreclose on your loan, than to sit down and renegotiate a workable plan for you.

So, what’s average Joe going to do? Should he sit back and wait for his own personal financial bailout plan? He’s not going to get one; not from the government. Average Joe is going to do what he does best, pull himself up by his bootstraps, and find his own rescue plan. Joe doesn’t know what will happen about his job, that’s not under his control. But what Joe can do, at least right now and if he acts swiftly, is control his spending, manage his debt and keep his home.

The way to do that is with the Average Joe Rescue Plan, more familiarly known as a Chapter 13 bankruptcy. It will allow him to reorganize his debt, and more importantly, prevent a desperate lender from foreclosing on his home. Contact our DebtStoppers attorneys, and learn how we can help you keep your American dream alive.

--Debt Diva

Have you ever heard of the Universal Default clause? Me neither. I may have a voracious appetite for reading, but that credit card fine print always gets past me somehow. I’m sorry I didn’t pay closer attention. The Universal Default clause is a gimmick (scam, rip-off, cheat, swindle -- pick your own verb) thought up by the credit card companies to rack up as much profit as inhumanly possible.

How it works is this, let’s say that you miss a payment or make a late payment on one of your credit cards and your interest rate on that card gets raised. That’s bad, but somewhat justifiable. Unfortunately, the credit card issuer of your other credit cards can now raise the interest rate on their card, because of you missing or making a late payment. It had nothing at all to do with their credit card, but you are penalized, nonetheless. DebtStoppers attorney, Rob Semrad, addresses this particular issue in this free video, which can be found in the DebtStoppers Video Learning Center.

You might be thinking that just because you never ever miss a payment or make a payment late, that you’ll be fine. You’ll also be wrong. If you use a credit card up towards the top of its credit limit, your other credit card companies can change your rate, because you will now be considered a higher risk. Even if you did nothing wrong; you’ve made your payments on time, never went over the credit limit. It’s called a universal review. It’s a maneuver that is totally unethical, but entirely legal… at least, for the time being.

With all the talk of the great big $700 billion financial bailout before the U.S. Congress, you may have missed something that will hit a little closer to home. The Credit Cardholder’s Bill of Rights or HR 5244 was put before the House last week, and won approval by almost 200 votes.

There are some very important changes to credit card rules and regulations which will have a tremendous (favorable!) impact on the consumers who carry credit cards. Not the least of which is the elimination of the Universal Default clause. Banks will also be prohibited from changing interest rates whenever and however they want; they will not be allowed to change interest rates retroactively and it would create proportional allocation of payments.

That last one is a good fix – say for example you pay different interest rates for purchases than you do for a cash advance, that’s pretty standard across credit card companies. When you make a payment towards your outstanding bill, the payment goes first to the interest on the type of purchase which has the lowest interest rate, not the highest.

Naturally, the banks are complaining bitterly. They’re already in a mess (of their own doing, if you ask me) and their credit card profit margins are down. Just so you know, as an industry, the credit card companies earn in the $30 billion range annually. So, they’re a bit upset. Oh, boo hoo. Tell it to someone who cares (he’s probably vacationing down in Crawford, though).

Consumers have been complaining for years about these unethical credit card practices, and no one listened. Until last week. Now, the House’s passage is only the first step; HR 5244 still has to make it through the Senate and then needs to be signed by the President. It wouldn’t hurt to call up or email your Senator and tell them how important it is to you as a consumer to pass that bill. Certainly (hopefully), when it reaches his desk, the President (whoever he may be) will gladly sign the Credit Cardholder’s Bill of Rights into law.

For some people, HR 5244 might be a case of too little, too late. These are the consumers already burdened with heavy credit card debt; DebtStoppers attorneys can help you even more than any legislative act. If you’re looking to ease your debt burden, contact us and we’ll show you your options.

--Debt Diva