Chicago Bankruptcy Lawyer Blog

Gone are the days when losing weight or kicking a smoking habit were top New Year's resolutions. This year, it's all about the money.

And for good reason. With millions of Americans facing foreclosure, out of work or otherwise struggling to pay the bills, it's time for a real change. It's time we stopped procrastinating and making excuses and instead started saving. Don't worry; it's easier than it might sound. And as an added bonus, creating a spending plan can actually help you achieve other changes in your life - like quitting cigarettes or eating more healthfully.

Unlike many folks fear, a spending plan doesn't have to take all the fun out of your shopping. But it can streamline your life by helping you make more realistic choices.

Continue reading "Start the New Year Right with a Realistic New Spending Plan" »

Imagine that you've got a $1,500 debt leftover from the holidays (not that big a stretch for some of us, no?). Now imagine that you receive an offer for an 18% interest rate if you transfer your balance from your current card - which has a 30% rate. Should you go for it?

It might seem counterintuitive, but the answer is often no. Even though less interest means less money in theory, creditors can make you jump through expensive hoops to get that lower rate - so expensive that they may cancel any benefits.

First, many credit cards charge transfer fees of 3 to 5 percent, according to the Associated Press. Are you willing to shell out $75 to transfer a $1,500 debt? Or $500 to transfer a $10,000 debt?

Continue reading "Credit Card Balance Transfers Not Always the Best Solution, Caution Chicago Bankruptcy Lawyers" »

Despite recent credit card reform, credit card companies aren't giving up all their tricks.

If you're anything like most Americans, you've probably been receiving a glut of mail from credit issuers in recent months - most of it notifying you of rather big term changes like higher interest and steeper penalties for exceeding your credit limit. But if you look at these notices carefully, you might notice another seemingly insignificant fee - a $1 or $2 charge for receiving paper statements.

At first glance, it might not seem like much. But if this indicates a new trend, we could end up paying $12-24 - or more - a year for each credit card, just for receiving statements the way we've always done. With many of us still struggling to make ends meet, we'd be better off switching to paperless statements and electronic payment.

Continue reading "Banks Start Charging Fees for Paper Credit Statements" »

We all know it's the thought that will count when we rip off the wrapping paper tomorrow. But that doesn't change the fact that some presents just aren't the right fit (sometimes literally).

With money tight, I don't think it's selfish to admit that we want to make every gift count - especially when we've shelled out a mini-fortune to buy presents for friends, family and co-workers. Fortunately, the same economy that is making our wallets thinner might be making it easier than ever to return or exchange gifts post-holiday.

According to MSNBC.com, certain retailers are extending return deadlines and making the rules for returning items more lenient.

Continue reading "Returning Gifts Gets Easier Thanks to Recession" »

Credit card companies are up to their old tricks.

With the last of new credit card laws scheduled to go into effect this February, banks are doing just as predicted - finding new ways to charge credit customers.

On the bright side, the legislation is already helping consumers in a few key areas. You may have already noticed that you're receiving bills far in advance of the due date, making it easier to avoid those outrageous late fees. And if worse comes to worst and you do make a late payment, you still have 60 days to pay up before you're punished with a higher interest rate (previously, banks could jack up your rate if you were as much as an hour past cut off time on the due date).

But here's the catch. Though your credit card company can't raise your rate on existing balances for no reason, they will be able to raise rates on variable rate cards or on future balances of any card - sometimes to as high as 80 percent!

Continue reading "Credit Card Interest Rates Hit New Highs" »

Citibank is giving some 4,000 homeowners a very happy holiday.

The banking giant is suspending foreclosures and evictions for people with Citi-owned loans through mid-January. A company spokesman said the aim is to reduce stress during a notoriously hectic time of year, according to MSNBC.com. In the meantime, the bank says it's at work on alternatives to foreclosure.

Unfortunately, helping potentially 4,000 families means only helping a miniscule percent of the millions of Americans that could lose their homes in coming months. For the lucky few, it will certainly provide relief (albeit temporarily), but the rest of us are going to have to take matters into our own hands if we want a home after the holidays.

Continue reading "Some Home Foreclosures on Hold for the Holidays" »

At first glance, a gift card seem like the perfect present. You don't have to worry about getting your friend or family member something she can't use - with plastic, she can buy whatever she wants. Or can she?

Research shows that, if your gift recipient procrastinates, you could be giving more holiday cheer to retailers than your loved one.

On the one hand, things might seem to be looking up. New credit card laws will also apply to gift cards, limiting fees that can be placed on cards inactive for less than a year and preventing funds from expiring on certain cards within five years. On the other hand, that only addresses one party - the gift recipient. But if the card gets lost, forgotten or otherwise goes unused, either fully or partially, where does that leave you, the gift giver, who could probably use some of that money back?

Continue reading "Gift Cards Might Be Easy Presents, But They Don't Come Cheap" »

Good news on the job front. With the economy picking up steam, employers are again warming up to the idea of raises, bonuses and 401k matches, according to USA Today.

It's a welcome change going into the new year. But it also brings up a couple good points.

First, getting a boost from your boss is not a given. As the article pointed out, 40 percent of employers said they plan to review salaries based on employee performance next year, according to a Towers Perrin survey. You might already know this, but a poor economy is no time to be slacking off. Nor is an improving economy, as businesses might be preparing to hire again - and there are plenty of experienced, educated and job-hungry candidates flooding the market.

Second, and maybe most important, a raise doesn't necessarily mean more money. As a wise old man once said, it's not the size of your wallet that counts, but the way you spend it.

Continue reading "Chicago Bankruptcy Lawyers Say Workers Could See Rise in Raises and Benefits" »

New consumer protection laws might mean creditors have to give up charging sneaky hidden fees, but unfortunately it doesn't protect against another one of their tricks - the minimum payment.

When most folks pay their credit card bills, they pay the minimum due - usually set at between 2 and 4 percent of the balance. It might seem like a good deal at first - when you buy that $500 flat-screen TV for Christmas, for instance, you'll only pay $10 a month, making the large purchase feel more affordable during a time when most people are strapped for cash.

But that's what creditors want you to think. In truth, you'll be forking over far more money than if you had coughed up the cash upfront. Minimum payments were created to keep you in debt - and paying your creditor - for as long as possible.

Continue reading "Minimum Payment Can Cause Maximum Debt" »

If you're in the habit of tossing mail from credit card companies before opening the envelopes, you might want to rethink your strategy.

With creditors in the process of making changes to counteract stricter regulation, it's likely that some of those envelopes you assume are just advertisements or routine legal notices are actually important updates from your credit card company of changes that could impact you financially.

For instance, both Bank of America and Citibank announced plans this year to begin testing an annual fee on certain credit cards. And American Express recently notified holders of its airline cards, including Delta, JetBlue and Hilton and Starwood hotels, that it would be revoking rewards to customers who don't pay their bills on time, whether they're repeat offenders or normally careful consumers who happened to make a one-time mistake.

Other predicted changes include higher late fees, a fee for calling customer service, receiving paper statements or merely requesting a higher credit line and higher interest rates. My words of advice? Check your mail carefully.

Continue reading "Read Your Credit Card Junk Mail Before You Toss It" »

Mention holiday expenses, and most folks think of immediately of the gifts. But the little costs of Christmas cheer can add up, too.

Take the typical holiday party. I have one every year. We're not talking anything fancy or expensive - just a casual gathering of friends for appetizers, drinks and Christmas movies - and yet, for many years, the cost of my simple gatherings was the last straw for my wallet. Between the groceries and festive decorations, it would push me over the line from simply scrounging to flat-out broke.

The problem was, I overdid it. Because I was focusing my budget restraint on the obvious - gift shopping - I wasn't paying attention to the smaller stuff like the food I was impulsively tossing into my cart at the store or the Christmas plates I bought off the sale rack or that cute pair of shoes I had to buy to go with that cute outfit I might wear at the party, and so on. It's hard to stay in control when you're being tempted by sales and discounts, pretty displays, tasty-looking treats and ads on TV, billboards and even shopping carts.

But use a few of the following tips to stick to your budget the same way you (hopefully) do the other eleven months out of the year and you'll be financially rewarded when the new year rolls around.

Continue reading "How to Have an Affordable Christmas Party" »

We often hear about how we shouldn't rely so much on credit. But rarely do we hear the other side of the story - the fact that many of us could no longer qualify for more credit if we wanted it.

Just a few years ago, lenders were handing credit out like candy - in the mailbox, at stores, on college campuses and through subprime mortgages. Heck, I even know 5-year-olds who were offered credit cards through the mail. But if banks are at fault for giving out credit consumers couldn't afford, we have to take some blame for spending what we couldn't afford. Many folks (myself included) once used that credit as an excuse to spend more than we earned. The end result? An economic meltdown that's caused consumers to default on their debts - and scared banks to get stingy with future credit.

So if credit is so dangerous, what's the problem if we have less of it? Because our economy needs some credit to get back on track.

Continue reading "Consumers Credit Is Getting Harder to Come By" »

Old-fashioned coupons are going high-tech.

With folks looking for ways to stretch their budgets this holiday season, millions of consumers who once scoffed at the idea of penny-pinching are turning to coupons. But rather than clipping them from magazines or packages the way Grandma used to do, they're going online.

Many coupon providers saw record traffic during this week's Cyber Monday, now considered the biggest online shopping day of the year. For instance, RetailMeNot saw 1.1 million shoppers - a surge of 57% over last year while CouponCabin visitors edged 65% higher, according to USA Today. The article also noted that over 20% more shoppers are printing online coupons this season than last year.

But as with any sale, it only pays off under the right circumstances.

Continue reading "Holiday Shoppers Going Online to Find Deals" »

Even though it's December, some folks are hearing a different kind of jingle bells - the sound of their phone ringing off the hook with bill collectors on the line.

When you're late with payments on your debt, the bank doesn't care that it's the holiday season. Forget peace and goodwill towards men - collectors are not going to give you a moment's rest until they collect your money. After all, it's their job to bother you. But even though it may not feel like it, you do have rights. If harassment from bill collectors is getting out of hand, you might be able to put a stop to it with help from a bankruptcy attorney.

Continue reading "Bankruptcy Can Stop Creditor Phone Calls" »