Chicago Bankruptcy Lawyer Blog

Loan modification is a good idea in theory. You can't afford your mortgage, so a modification company convinces the bank to rewrite your loan, lowering your monthly payment to a more reasonable level. You can afford to keep your house while the bank avoids having to go through the costly foreclosure process - and under the government's new Making Home Affordable initiative, gets a $1,000 incentive for modifying your mortgage. Everybody wins, right?

Ah, if only that was the reality. The $75 billion taxpayer-funded mortgage relief program was intended to prevent millions of eligible homeowners from falling into delinquency and foreclosure. But instead, millions are still losing their homes.

It seems that despite the money carrot, lenders are still not buying the program. A recent story in the New York Times exposed what consumer affair bureaus have known for a long time - many candidates for loan modification never make it through the red tape at the bank.

Continue reading "Illinois Bankruptcy Lawyers Compare Benefits of Chapter 13 to Loan Modification" »

Creditors are cutting credit limits - and not just for high-risk customers, according to an article in BusinessWeek.

It's been reported that 16% of customers had their limits reduced between April and October 2008. Of those, approximately 11% were low-risk customers with high credit scores. These are the people with steady income who pay their bills on time, don't bounce checks and don't take out cash advances. So what are they doing that creditors don't like? They're carrying a balance.

Continue reading "Chicago Bankruptcy Attorneys Warn Credit Card Companies Are Lowering Limits for Consumers" »

Sometimes there's nothing scarier than the unknown. When you're a kid, it's the monster you swear is hiding under your bed at night. When you're an adult, the fears that keep you up at night are a little more based in reality - like bankruptcy.

With so many Americans in debt and facing foreclosure, you'd think Chapter 13 would be a no-brainer. It's the only surefire way to prevent foreclosure and often times the most effective way to get out of debt. Yet some folks will give up their house before they file for bankruptcy because they've been led to believe it will wreck their credit or land them in court - neither of which is true, by the way.

Continue reading "Don't Let Fear of the Unknown Keep You In Debt, Say Illinois Bankruptcy Lawyers" »

June is a sneaky month.

It holds no major holiday, no income tax payments, no back-to-school shopping, but somehow it always costs me an arm and a limb. Just as I've finished paying off my Christmas shopping damages, I get bombarded with graduations, bridal showers, weddings, Father's Day and birthday after birthday (seriously, does everyone in my family have a birthday between May and July?). If I was a parent, I'm sure I'd also be dealing with out-of-school kids clamoring for a vacation and trips to the amusement park (oh wait, that's the job of my significant other!). Goodbye, relaxing summer.

That's the bad news. Here's the good news. I've finally learned to expect this rash of warm-weather expenses, which means I've been able to plan for it. Anticipating the spending spree hasn't entirely eliminated the pain, but it's helped a lot. I know because I haven't added to my debt. What's the secret? I've been using cash, not credit.

Continue reading "Chicago Bankruptcy Lawyers Suggest Swapping Cash for Credit to Save on Gift Giving This Summer" »

When the real estate bubble burst, I learned an important lesson: home values don't really matter.

Of course, if you're one of the millions of Americans writing monthly checks for a mortgage now worth more than your house, you're probably shaking your fist at me right now. But hear me out.

The idea of a house as an "investment" is relatively new. Yes, when the market was at its peak several years ago, it was common for people to flip houses - buy them, fix them up and sell them - for large profits, sometimes double what they paid just a year earlier. But the truth is, that was a fluke. For decades before the housing bubble, the housing market saw much more modest gains of maybe just a few percentage points per year. In fact, it was a common belief that if you didn't remain in a house for at least five years, you wouldn't be able to break even when you moved.

Continue reading "Chicago Lawyers Remind Homeowners That a House Is Worth More Than Its Current Value" »

Some things never change. Despite the fact that oil was at a record low just six months ago, gas prices have begun their annual summer hike. And this year is poised to be a little more painful.

Though today's average national price of $2.68 a gallon is still lower than $4 a gallon peak we saw late last summer, we've hit 50 days of increasing prices - the longest consecutive rise since records that go back to 1996. Add that to record-high unemployment and foreclosures and you get the possibility of a pretty miserable summer for most drivers - at least financially-speaking.

In a recent post, I mentioned some tips for saving money this summer. In this case, the simple solution is to leave the car in the driveway.

Continue reading "Illinois Bankruptcy Lawyers Find Ways to Save Cash as Gas Prices Grow" »

Have you noticed the post office getting a little louder lately? OK, probably not, but the recent surge in foreclosures has also led to a surge in jingle mail.

What is jingle mail? It's when homeowners walk away from their house rather than go through the foreclosure process or continue paying an upside-down mortgage. In some cases, they simply put their house keys in an envelope and mail them to the lender, hence the jingling sound.

Homeowners that walk do it because they mistakenly believe there is no other solution. They're upside-down on the mortgage - meaning their home is worth less than the loan they must still pay - or maybe they simply can't afford to make their loan payments any more.

But jingle mail is not the only option.

Continue reading "Illinois Bankruptcy Lawyers Offer Chapter 13 as Alternative to Foreclosure" »

You generally pay the bills on time, you make sure not to exceed your credit limit and you haven't opened any new credit card accounts lately. You must have decent credit then, right?

Not necessarily. Don't get me wrong - it certainly sounds like you're doing a good job. But there's only one way to know for sure: You have to check your credit report. It sounds easy enough, but it's a step most Americans don't take. And that's a shame, because it can be a virtually effortless way to improve your finances.

Continue reading "Checking Your Credit Report Can Help Your Credit Score, Say Chicago Bankruptcy Attorneys" »

The savings rate in America has soared to an average of 4 percent - for every $100 we receive, four bucks are being tucked away for the future. Think $4 doesn't sound like much? Compared to the paltry 1 percent we were stashing just a couple years ago, we've quadrupled our savings.

We're starting to wake up and realize that we can't put savings on autopilot. I used to count my automatic 401K contribution as my monthly savings so I would have more of my paycheck to spend. I figured a retirement account was relatively safe. But I was forgetting the first lesson of investment 101: Don't put all your eggs in one basket.

Continue reading "Illinois Bankruptcy Lawyers Urge Americans to Save More Money" »

When I was a kid, the summertime blues meant not having enough to do. Now I realize it's about having too much to do - and not enough money to do it with.

June kicks off the season of vacations, barbecues, cranked air conditioners, movies and restaurant meals. And for many of us - particularly this year - the possibility of new depths of credit card debt. But it doesn't have to be that way. With a little planning, you could actually go into the fall season with healthier checking account - and some great summer memories.

Keep it local
OK, by now I'm sure you've heard of a staycation. But despite the annoying buzzword coined last year, the concept is a good one. Sure, you could blow a fortune on
gas, plane tickets, hotel and meals out every day. But why halfway across the country when you can experience fun in your backyard? Most people don't know about all the available activities in their region because they're residents, not tourists. Check out the events section of your local newspaper or pay a visit to your Chamber of Commerce and find out what kind of fun is right around the corner. Local events often include free museum days, nearby scenic hikes, outdoor movie showings, concerts in the park and more. And if the kids are itching to get out of the house, how about setting up the tents in the backyard for a night?

Continue reading "Chicago Bankruptcy Lawyers Offer Tips for Saving Money This Summer" »

Parking tickets are on the rise in Chicago, according to the Chicago Tribune. But that's not the shocking part of the story. What's surprising is that even though three-quarters of contested tickets get dismissed - and many of those tickets are proven to be errors - some people are still forking over ticket fees without so much as a fight.

In today's economy, we can't afford to be lazy. But I see it happening again and again. People sign up for Netflix, but forget to watch the movies. Or they pay for the gym, but don't make the time to go. Just this week, a few of my friends agreed that they were above clipping coupons and looking for sales. It wasn't worth their time to save a dollar here or there, they said. They'd rather just pay full price.

Continue reading "Illinois Bankruptcy Lawyers Find Ways to Save Money and Stop Spending Leaks" »

I admit it - I have cell phone envy. Now I'm normally pretty wise about financial decisions (or at least, I like to think I am) but phones have always been a weakness of mine - and I've had the credit card debt to prove it. It was a matter of keeping up with the Joneses. When all my friends started showing up with flip phones years ago, I had to have one. When a few coworkers bought phones with keyboards, so did I. I was going through a new phone a year, at least - I think the guys at the electronics store knew me by name.

Unfortunately, I paid a lot more for my collection than the price tags on those new phones.

Continue reading "Chicago Lawyers Use Bankruptcy to Eliminate Credit Card Debt Caused By Consumer Spending" »

I don't need to tell you that getting a foreclosure notice in the mail is a stressful event. But for some folks, it's such a shock that it blinds them to common sense. In their state of desperation, they can fall victim to foreclosure rescue scams.

As foreclosure rates skyrocket (check out the latest numbers), so do instances of frauds. So-called foreclosure rescue specialists promise to save your home by a number of different methods. Sometimes they ask for fees or mortgage payments up front - and then disappear after a few months, with your money. Or they'll ask you to sign documents for a new loan that will supposedly make your existing mortgage current - but you're actually signing documents that surrender the title of your home. In another method, they might directly ask you to surrender your title so they can buy your home and let you rent it, with the guarantee that you'll be able to buy it back in a few years. But, conveniently, the terms of the deal are so complicated that regaining your house is just about impossible.

Continue reading "Illinois Bankruptcy Lawyers Warn About Foreclosure Rescue Scams" »