Chicago Bankruptcy Lawyer Blog

With Christmas shoppers strapped for cash, some folks are looking into how they can help friends and family at the smallest possible cost.

At its best, a more frugal holiday brings out our creative sides - I know folks who are making homemade gifts, finding small but thoughtful presents or just performing simple acts of kindness. At its worst, though, seemingly inexpensive gifts can drag us into debt - I'm talking about loan co-signing.

At first, it might seem like the perfect present. Let's say you're short on cash and your best friend is in need of a new car. Rather than buy her a Christmas gift, you offer to co-sign her car loan. You're helping her out at no expense to yourself, right? Not always. Unfortunately, it can turn into the most expensive present you've ever bestowed.

Continue reading "Chicago Bankruptcy Lawyers Warn Against Cosigning Loans" »

Pumpkin pies might be in the oven and football on the TVs, but there's something else on the minds of most Americans today - shopping strategies for the infamous Black Friday.

I know, it's old news that Black Friday is the biggest shopping day of the year. But there's a new twist on the tradition - almost half of sales this year might actually take place online.

With most of us living paycheck to paycheck already, we don't have a lot of wiggle room when it comes to our holiday budgets. And the Internet offers unlimited access to sales and clearances and a great way to compare prices, helping us save time as well as money. Unlike store shopping, online shopping allows you to look specifically for what you want without getting sidetracked by fancy displays or pushy sales clerks. And maybe best of all, you don't have to freeze your butt off standing in lines at the crack of dawn.

But as always, there's a catch. This time, it's online shopping scams.

Continue reading "Watch Out for Holiday Shopping Scams" »

Most credit card companies don't give you a choice when it comes to raising your rate, but at least one company is willing to strike a deal with you. Whether it's worth it, well, that's for you to decide.

Citibank, like many credit providers, is hiking its interest rates. But the company is giving a rebate to customers who spend enough money on their card - up to $750 a month, according to USA Today. How much you'll need to spend depends on your credit history, and you'll have to make payments on time to qualify, but if you follow all their guidelines you could erase some or all of their rate increases. If the program works, expect other creditors to follow suit.

Now, if you're already spending the minimum amount, the program's benefits might seem like a no-brainer. For making no changes whatsoever, you avoid the new rates (though you could probably save more money by simply cutting back on your credit card usage - but we'll get to that in just a minute).

Continue reading "Credit Card Company Asks Customers to Spend Money to Save Money" »

A growing number of Americans aren't going to be home for the holidays this year - and it's not because they're traveling.

Despite news that the economy is under recovery, foreclosures are again on the rise as a growing number of borrowers with good credit and fixed-rate loans default on their mortgages. It's just the opposite of what triggered the recession - when borrowers with bad credit began defaulting on subprime mortgages with adjustable rates.

So what's going on? Homeowners are simply running out of money. Chalk it up to too much financial stress for too long. Some folks were laid off months ago and are still out of work - and out of cash - today. Others are growing weary of bearing the burden of debt. Economic recovery might look good on paper, but families across the country are still suffering from the recession. To make matters worse, the holidays are fast approaching - and that means more spending.

But fortunately there's a way to save your house, whether you've missed your first mortgage payment or the bank is already threatening to foreclose.

Continue reading "Mortgage Defaults Increase Despite News of Economic Recovery" »

If your financial state has you struggling for something to be thankful this year, take heart - at least your holiday meal won't cost as much as last year.

For the first time in almost a decade, the price of a Thanksgiving meal has dropped.
A traditional dinner of turkey, mashed potatoes and gravy, stuffing and all the fixings will cost an average of $42.91 for a group of 10 people, roughly 4% less than it did a year ago, according to the American Farm Bureau Federation.

It might be hard to imagine (I know I grit my teeth every time the grocery store clerk rings me up) but food prices have indeed declined as a result of lower energy costs and the effects of the recession. As an economist noted in a farm bureau press release, the cost of a Thanksgiving meal now costs less per person than a fast-food restaurant "value" meal. Such savings often goes unnoticed as we struggle to put food on the table while our boss is freezing wages and eliminating bonuses - or, worse, cutting our job. But, since this Turkey Day is all about giving thanks, there's no better time to focus on the positive.

Continue reading "Thanksgiving Meal Costs A Little Less This Year" »

Remember that stimulus package the government enacted back in February? Well, apparently Uncle Sam got a little too generous.

It's just been announced that up to 15 million taxpayers could owe some of that stimulus money back next year. Why? Under the Making Work Pay tax credit, most working Americans had less withheld on their paychecks, resulting in extra take-home pay of about $60 a month. But when the government changed its withholding tables for the new system, it didn't factor in things like whether someone was married to a working spouse, held more than one job, was retired with income taxes withheld on their pension or was a college student still being claimed as a dependent on their parents' taxes.

So let's say you have two jobs, each one earning at least $20,000. That means you could have been credited twice - and will owe half of that money back to the government on your income taxes. If you're owed a tax refund, that refund will simply be reduced. But if you owe taxes, you'll also have to pay all that stimulus money back to Uncle Sam come April. Fortunately, there's a way to help ease the pain of such nasty surprises.

Continue reading "Some Employees May Have to Pay Stimulus Money Back" »

Short on cash? How about turning some of your trash into treasure?

Every time I start complaining that I don't have enough living space, I clean my closet and realize that it's me, not my house, that's the problem. And unless you're a neat freak, I bet you've got a stash of unused stuff somewhere, too.

But purging your junk doesn't just free up more space. It can also free up cash - especially handy now that the holidays are upon us (read on for a more permanent way to free up money).

Take your old jewelry, for instance. Gold is going for a record $1,119 per ounce as investors buy up the precious metal in hopes of protecting themselves against a falling dollar. Have some of your mom's gold jewelry from 20 years ago, maybe something that doesn't carry much sentimental value? You can get a pretty penny for it - and clear out some space in your jewelry box at the same time. (Word to the wise, though - get it appraised by a professional, not a pawn shop or someone in a TV ad, to get your fair share.)

Continue reading "Selling Unused Stuff Can Be a Golden Opportunity for Cash" »

There's a lot of (legal) pick pocketing going around, but that shouldn't mean we have to put up with it.

Remember last month when we discussed the growing cost of credit cards? In response to new legislation meant to protect consumers from unfair fees and term changes, credit card companies are lowering limits, raising rates and adding brand new costs - like an annual fee or a penalty for non-use.

Now, banks are getting in on the action by becoming greedier with their checking accounts. Unlike a credit card - which, believe it or not, you can choose whether or not to use - checking accounts are pretty much a necessity now that we don't hide our cash under the mattress like Grandma did. So it was a little disturbing when I noticed my former bank had started charging a $9 account maintenance fee each month.

Continue reading "Banks Find Ways to Make Checking Accounts More Expensive, Chicago Bankruptcy Lawyers Say" »

Every fall, I hope for a gradual transition from warm to cool weather. And every year, I'm rudely surprised as we go immediately from the last Indian summer night to a chilly, frost-covered morning. As if being robbed of balmy fall temperatures weren't enough, I get that first big heating bill. Not a good start to the holiday season.

But unlike fixed costs such as your mortgage or car loan, you have the power to lower your winter heat bill. It just takes a little self-discipline - and sometimes a new financial strategy.

Let's talk about the discipline part first. Don't worry, I'm not asking you to freeze. I'm merely suggesting that you turn down the thermostat a few degrees during the day and program it so it doesn't fall below 55 degrees at night, when you're bundled up in bed anyway. Then, when your body adjusts, you can try lowering it a few more degrees during the day if you choose. I used to keep my thermostat at 70 degrees no matter what. When I dropped it to 64, I shaved 20 percent off my heating bill. And I got more use out of all those cute sweaters I've been collecting over the years.

Continue reading "Save Money on Your Heating Bill This Season" »

Sometimes finding help is as easy as asking for it.

Uncle Sam heard our cries for help loud and clear - in one particular case, at least. With the housing and job markets lagging behind recent economic progress, Congress has just opted to expand a popular homebuyer tax credit and continue handing out unemployment checks.

So what does that mean for you? If you're in the market for a house, you could still be in line for the $8,000 tax break that was originally set to expire at the end of the month. And if you live in a home you've owned for five years or more, you're now eligible for up to $6,500 off your taxes. Without a job? Unemployment will be extended by another 14 weeks (20 weeks in states with unemployment of more than 8.5%).

Once upon a time, Americans lost their homes, cars, possessions and reputations because they were too embarrassed to seek help. But that's changing - help is coming to you. You just have to keep your eyes open.

Continue reading "Uncle Sam Extends Homebuyer Credit, Unemployment Checks " »

What do you think of when you hear ads for FreeCreditReport.com? Call me crazy, but I always assumed they were publicizing a way to, you know, get a free credit report.

I guess I'm more gullible than I thought. Turns out that the company gives you a credit report, alright - but for a pretty penny. Once you sign up for their services online, you're enrolled in their credit monitoring program, meaning you'll pay $14.95 per month for them to notify you of any changes to your credit. Some quick math reveals that's $180 a year - no small change, considering most Americans are living paycheck to paycheck and struggling with debt.

Not surprisingly, this isn't sitting well with the Federal Trade Commission, which believes the company is intentionally luring people away from a government website that offers truly free credit reports - AnnualCreditReport.com. Uncle Sam requires that the three major credit bureaus - Experian, Equifax and TransUnion - hand over a free report to consumers every year.

Continue reading "Despite Advertisements, Credit Reports Aren't Always Free" »

Higher interest, a lower credit limit and a larger minimum payment - the new changes credit card companies are throwing our way aren't exactly in the holiday spirit. But at least one of these changes can actually be spun to work in your favor.

In the past, most credit card companies kept minimum payments as low as possible - around 2-3%. They figured the less you paid each month, the longer you'd have to keep paying. But with thousands of consumers defaulting on their credit cards, companies are getting anxious - they'd rather have their money now.

Of course, the downside to a higher minimum payment is that you'll see a jump in your monthly expenses. If you're paying 2% on a $10,000 debt, that's $200 a month. Double that to 4% and now you're paying $400. When you're already struggling to pay the mortgage or buy groceries, a couple hundred more bucks is hard to come by. And it means you're going to have to cut back somewhere else.

But here's where the benefit comes in.

Continue reading "Higher Minimum Payments Can Save Money, According to Chicago Bankruptcy Lawyers" »