Chicago Bankruptcy Lawyer Blog

Some rules were made to be broken - and paying off your debt is no exception, say Chicago bankruptcy attorneys.

Common wisdom has always held that it's best to pay off the debt with the highest interest rate first - and for good reason. This way, you'll save the most money because you'll be avoiding the biggest future payments, and you'll keep your most expensive debt burden from growing.

But there's a downside to this strategy. As you know, the key to lowering debt is to pay more than the minimum balance, since small minimums like 2-4% might not cover much more than interest. And if you're only paying interest, the principal - the actual amount for the items you purchased - will stay the same, meaning you'll have to keep making those interest payments indefinitely. Problem is, people often get discouraged if they find it difficult to pay enough to cover a high interest rate plus some of their principal. And they use this as an excuse to quit.

Continue reading "Chicago Bankruptcy Attorneys Say Paying Off Any Debt Is Better Than Doing Nothing" »

Remember the days when lenders would look at your credit score to determine whether you were a risk? It was so much simpler back then.

So what's changed? Social networking was invented. By now, most us use - or are at least familiar with - Facebook. And so are lenders, creditors and employers, who are increasingly looking up applicants online to see what comes up, according to Chicago bankruptcy attorneys.

Obviously, it's not going to bode well for you if they see photos of you kicking back cocktails and dancing on tables at your favorite club. You say it's unfair to judge you for what you do on your own time? You have a point, but wait, it gets worse. They also check out your friends. The idea is, responsible people might choose responsible pals. That means whether or not you get that loan might rest not just on the level of your debt, but on whether or not your best friend forever posted those pics from her bachelorette party.

Continue reading "Chicago Bankruptcy Attorneys Warn Social Networking Could Affect Your Credit" »

It's nearly impossible to turn on the TV or computer without being startled by images of the dire situation in Haiti. And while we all wish that we could undo the damage (and many of us are generously opening our wallets to help try), we can also take home a lesson from the tragedy about the real meaning of hardship.

Many of us are struggling to pay the bills and fend of foreclosure. But regardless of what our outcome is, most of us will have food, running water and a roof over our heads - whether it's in a roomy house or a shared apartment. Worst case scenario, we have family, friends or organizations available to help us get back on our feet. Haitians don't have that luxury right now.

Now, I don't mean to indicate that we're in any way superior just because we're American. Lucky, is more like it. What happened in Haiti two weeks ago is a combination of geography, economy and pure bad luck. And hopefully, the country will be able to rebuild with global help so that, whatever happens in the future, they'll have the infrastructure and resources to survive. My point is, no matter what your situation, it could always be worse. There is always a reason to be grateful -- even when debt seems to be running your life.

Continue reading "Finding Debt Relief Might Be Easier Than You Think, Say Chicago Bankruptcy Attorneys" »

It's bad enough that we have to deal with pushy retailers and their promotions when we go to the mall, but now they're following us into our home, say Chicago bankruptcy attorneys.

When you fill out online surveys, enter drawings at stores or even use your credit card to pay, you're giving retailers access to your personal information. Next thing you know, your mailbox is filled with catalogs and your inbox with ads, and the phone is ringing off the hook with store employees who want to tell you about their next big sale. Ever visited eBay or Amazon and saw a homepage filled with a bunch of stuff you like? It's no coincidence - those picks are just for you, based on what you've been viewing online.

That's fine if you have all the money in the world and don't mind the harassment. But for the large majority of Americans -- many of us struggling to balance paying off debts with making the mortgage - it's just another obstacle to financial freedom.

Continue reading "Chicago Bankruptcy Attorneys Say Protect Privacy to Stop Harassment and Save Money" »

When your car is in the shop, you know you can ask a friend for a ride. When you find a new home, you trust you can rely on your family to help you move. But when it comes to getting help with debt, most of us don't even bother to ask, Chicago bankruptcy attorneys point out.

Sometimes it's denial. We don't realize how much we're spending until we open up our bills, and then - unable to pay - we push the problem to the back of our minds. Other times, it's fear. Yes, we know we're in financial trouble, but we don't know where to turn so we do nothing. In the short term, trying to handle a mountain of debt alone might mean living paycheck to paycheck. In the long run, though, it could mean losing your house to foreclosure or worse.

Finding your way out of debt might not be easy, but it can be done. And, as the old saying goes, two heads are better than one.

Continue reading "Chicago Bankruptcy Attorneys Say Sometimes Lowering Debt Is As Easy As Asking For Help" »

Bad news for married women (or good news for men): wives are no longer seeing the economic returns that they once did from marriage, Chicago bankruptcy attorneys say.

On the upside, women have come a lot way since 1970 and earlier, back when marriage meant a significant boost in income courtesy of their husband. We've surpassed our male counterparts in both education and salary over the past four decades. More men than ever are married to women who earn more than they do and, vice versa, more women are married to men who earn less. In fact, nearly one-quarter of women earn more than their husbands today, compared to a measly 4 percent in 1970, according to the Associated Press.

But there's still a major inequity. Though we've been increasing our earning power, women are still earning just 78 cents for every dollar a man takes home. And much of that hard-earned income is going to bills for debt.

Continue reading "Chicago Bankruptcy Attorneys Say Marriage No Longer Means Economic Benefits for Women" »

Those late payments can cost a lot more than the late fees they result in.

When consumers take longer to pay their bills, businesses have less cash handy to pay their own bills, setting off a cycle that slows down the entire economy, Chicago bankruptcy attorneys say. Statistics agree. Legal firms, for instance, received payments approximately three days later in 2009 than in 2008, according to financial information firm Sageworks. Architectural and engineering businesses waited closer to five days longer, while poor tax preparers and bookkeepers saw wait time for their money increase by 10 whole days.

In most cases, the economy is out of our control. But this might be the one time when you can make an impact on the bigger economic picture. By reducing your debt, you can free up funds to pay your bills on time, bidding adieu to late payment fees and boosting the economy at the same time.

Continue reading "Chicago Bankruptcy Attorney Tips for Avoiding Late Payments" »

The word is out - the $75 billion loan modification program meant to protect homeowners from foreclosure has actually made the situation worse.

Out of the millions of Americans facing foreclosure, Uncle Sam's program modified mortgages for just a few hundred thousand - some of which ended up going into foreclosure anyway. Now critics are saying the program has worsened the crisis by leading us on. Instead of saving money for alternatives to modification or, worst case scenario, for moving to a new residence, many folks kept holding out hope that modification would save them - until it was too late.

Many homeowners simply can't afford to keep their homes - and unless they can get rid of debt or change their lifestyle, a modification that barely lowers their mortgage isn't going to make much difference. Fortunately, that's where Chapter 13 bankruptcy comes in, according to Chicago bankruptcy attorneys.

Continue reading "Chicago Bankruptcy Attorneys Say Government Loan Program Helped Make Foreclosure Crisis Worse" »

The recent recession did more than change our finances - it also changed out attitudes, according to Chicago bankruptcy attorneys. And that's a good thing.

Many of us are vowing to make 2010 the year we finally find freedom from debt. And our new treatment of money means some of us have a head start we didn't even know about. How did it happen? Many Americans lost work hours or changed jobs in the past year or so. But instead of simply cutting back by the amount we gave up in salary, we've been changing our lifestyles. We're doing more with less.

Yes, some of us are working longer hours to make ends meet, but the vast majority are filling some of that extra time with not looking for new work, but finding new hobbies - cooking more at home, starting a backyard garden, taking classes at the local community college, reading books, checking out museums and other cool stuff in our hometowns, getting outside or - here's a novel idea - actually spending quality time with our families. Crazy, I know. Fortunately, there's a way to balance our new lease on life with debt-free future - bankruptcy.

Continue reading "Chicago Bankruptcy Attorneys Explain How the Recession Is Helping Us Live Better with Less Money" »

Some folks don't save because they think they can't afford to, but many more have another excuse - they don't want to go without. A dollar saved is a dollar you can't spend, right?

But that's not true. A good savings plan isn't about not spending - it's about earning. I'm talking about interest. Whether you stow your cash in a savings account, a 401k, a CD, government bonds or the stock market, you're (hopefully) going to earn a certain level of return. Think about it this way: if you can spend more of your money this year investing in your future - and less paying off debt - you can go from forking over interest to earning interest.

Of course, first you'll have to tackle that annoying debt and come up with a savings plan that's right for you, as we discussed on Tuesday and Thursday. Then comes the fun part - making more money.

Continue reading "Get The Most From Your Savings With Interest" »

What if I told you there's a way to increase your income by adding another payment each month? You'd probably think I was out of my gourd, right?

Fortunately for you, I'm not. See, there's a twist - the extra payment is to yourself. That's right, I'm talking about saving.

On Tuesday, we talked about how easy it is to start achieving your savings goals once you get over the hurdle of all those excuses that have been holding you back. Today, we're going to look at how to make the most of those newfound dollars -- especially when you're in debt.

Continue reading "Put Your Savings Toward Debt First" »

Saving money often presents a problem. You know you need to start saving, but you can spare so little thanks to your debt, you figure why even bother.

Well, I'm going to let you in on a secret: every little bit counts. It's better to save one dollar than to save no dollars at all. And if that one dollar is what it takes to get the ball rolling on your fresh financial start, then it's worth a lot more than its paper value.

Most folks tell themselves saving would be easier if they just made a little more money. But chances are when you finally get that much-needed raise, you'll quickly find other uses - and excuses - for your cash. However, if you can set aside just a couple bucks each month starting now, you'll kickstart a habit that can last you a lifetime, no matter how much you get in your paychecks.

Continue reading "Change Your Financial Mindset to Start Saving Money" »

Using cash usually makes more sense than credit. You don't have to deal with interest, you know you can't spend more than what's in your account and the act of physically parting with your money makes you less likely to splurge -- and wind up in debt.

But there's at least one pitfall to paying with paper - ATM fees. Let's say you need to take out some money and you aren't anywhere near your bank. Instead, you go to the nearest ATM. You can expect a fee of at least $3 for using an ATM other than your bank's. And that's not all. Your bank thinks it has to punish you for withdrawing money elsewhere, so you can also expect to get dinged up to $2 on the other side. If you're taking out $20, you've already spent a quarter of your money before you even break the bill.

Fortunately, the situation can be pretty easily avoided.

Continue reading "Watch Out for ATM Fees That Add Up" »