Chicago Bankruptcy Lawyer Blog

Many Chicago taxpayers are thanking the economic downturn for at least one thing this year: a tax refund. But what if you're one of the millions of struggling Americans who still owe Uncle Sam?

Fortunately, you've still got options. Not included in those options? Not filing. Putting off your tax bill will only make things worse, as IRS penalties can accumulate faster than you can count them. Not only that, but tax debt can lead to a ruined credit score, garnished wages and sometimes even jail time. The IRS is no ordinary collection agency and they will make you pay sooner or later.

But the same things that make the IRS different can also work in your favor. Unlike most creditors and debt collectors, IRS agents usually reward communication. If you can't pay right now, don't ignore the situation - explain it. As long as you file your taxes, you might be eligible for the following solutions.

Continue reading "Bankruptcy Can Help Chicago Taxpayers Pay Off IRS Debt " »

There's a reason you might want to fill out your 2010 Census carefully and soon. And it's not just because doing so can help your community get more federal funding, according to Chicago bankruptcy lawyers.

Dragging your feet increases the chances that a census worker will call to check up on you. That in itself isn't the problem - scam artists are. See, in the past people have posed as census workers to gather sensitive personal information, like social security, bank account and credit card numbers. By putting off the census - or by being careless about who you interact with - you could be increasing your identity theft risk.

Fortunately, it's easy to tell official census workers and materials from the frauds.

Continue reading "Chicago Residents Find Ways to Avoid Identity Theft during the 2010 Census" »

Blame it on college students. Somewhere along the way Spring Break came to be known as the time to take an exotic (i.e. expensive) vacation. The problem is, with many Chicago residents in debt - maybe even thinking about bankruptcy - now might not be the time to splurge on a pricey getaway.

Now, I understand that you might be getting a little antsy staying at home - hey, I usually have spring fever myself by the end of March. Not to worry. There's no reason you shouldn't be able to take a little vacation, or at least give yourself a break at home. You just have to keep an eye on how much you're spending.

Remember, anything you save this spring can be applied towards future trips or other splurges. Or it can go towards paying today's bills - or lowering debt - so that you'll have more money to play with in the future.

Continue reading "Chicago Spring Break Vacationers Can Save Money with a Cheap Destination and Good Spending Plan" »

A mortgage payment is the biggest bill most Chicago residents pay each month. So with mortgage rates at the lowest they may ever get - around 5 percent - now might seem like a good time to bullet and pay off your home loan early, if you can afford it.

But for most of us, just the opposite is true.

A low rate is actually a bad time to pay down a loan - especially if we're carrying debt or have neglected to start an emergency savings fund. We'd be better off paying down our credit card debt, and here's why.

Continue reading "Bankruptcy Might Yield Better Savings Than Paying Down the Mortgage for Chicago Residents " »

Can there ever be too much of a good thing? Maybe when it comes to budgeting.

Don't get me wrong - sticking to a budget is not only smart, but it can help you kick start a savings plan and even pay down credit card debt and other obligations. Problem is, Chicago consumers have heard so much about the merits of bankruptcy since the recession started that many of us are beginning to tune out. We've been oversaturated.

Going without a budget might save you some work, but it will cost you. Whether you've got a stable salary (is there really such a thing?) or no income whatsoever, a budget is just a way to ensure the money in your bank account goes towards the things that matter most to you - whether that means saving for a house, a vacation to Hawaii or finding freedom from debt.

Continue reading "Having a Budget Can Help Chicago Residents Start Saving and Pay Down Debt" »

I'm used to paying for services like electricity, TV and food - but somehow I don't think I should have to pay a bank to take my money.

Yet banks in Chicago and all over the country are charging Americans hundreds of dollars per year just for the privilege of being customers, according to Chicago bankruptcy attorneys. Since most of us don't budget for those kinds of fees, they can catch us off guard. Sometimes we don't even realize we're being charged until we take a closer look at our statement - and, by then, it's too late.

Twenty bucks a month is $20 you could spend on tank of gas, a meal in your favorite restaurant or - best of all - towards lowering your debt. Instead, it's going to your bank. How would you like to recover that lost cash? Here are a few tips.

Continue reading "Don't Let Chicago Bank Account Fees Leave You in Debt" »

If you become alarmed when opening your next credit card statement, it might actually be a good thing.

Now that the Credit CARD Act of 2009 is in full effect, creditors in Chicago and beyond are required to include a lot more information on your bills. That includes not just the interest rate, but the amount of time it will take you to pay off your debt if you pay the minimum balance - and the total cost.

A word of advice: you may want to be sitting down when you take a look at the numbers. Since most of us are in the routine of making monthly payments, we rarely take the time to calculate just how much we'll end up paying. By withholding that information, creditors keep us from thinking about it - and that keeps us spending. But seeing it in print can be a shock. And it might be just the shock we need to snap to our senses and start paying down debt or learning about our options - like bankruptcy.

Continue reading "New Statements Could Encourage Chicago Credit Card Holders to Lower Debt with Bankruptcy" »

Most folks would never leave the house without locking their front door. But many of us are essentially doing the same thing with our computer, say Chicago bankruptcy attorneys.

A recent study found that the most common password is still - surprise - 123456. Other passwords are often too short and use common terms like "qwerty." Even worse, the most common security questions (What is your mother's maiden name? Where did you graduate high school? ) are easily available on social networking sites like Facebook.

Considering hackers today can break into hundreds of accounts in just a few minutes, most of us aren't doing enough to protect our banking and credit card information online. Changing your password is a hassle, but it's an even bigger hassle to try to recover thousands of dollars - and rebuild your life - after identity theft. Here are some tips to make protecting your finances easier.

Continue reading "Good Passwords Can Protect Chicago Computer Users From Identity Theft" »

It seems like just yesterday that a round of credit card reform laws was enacted (well, actually it was just last month). But the Federal Reserve already has another idea to help consumers.

If passed, a proposed law will limit credit card fees by prohibiting your credit issuer from charging you more than your violation. So if you exceed your credit limit by $5, then you'll owe $5 - instead of the $40 they currently charge. Credit card companies would be banned from charging more than one fee for the same violation and inactivity fees - penalties levied for not using an account - would be eliminated.

Pretty cool, huh? But here's the catch. To benefit, you have to use less credit. And for some folks, filing for bankruptcy is the best way to reduce dependence on credit cards - and therefore lower debt.

Continue reading "Consumers in Chicago Could See Limited Credit Card Fees If New Law Is Passed" »

Income taxes aren't the only thing to dread come spring - but there's a silver lining.

With warm weather on the horizon, gas prices are starting their typical upward climb, say Chicago bankruptcy attorneys. The price at the pump is up 9 cents this month and fast approaching a $3 a gallon national average. That's an increase of 81 cents over last year, according to AAA.

Now here's the good news. First, a rising Illinois unemployment rate - about 11 percent as of January - may come in handy when it comes to gas prices. Less folks driving to work means less demand for oil, and possibly an affordable summer at the pump. Second, there are some easy ways to save money by offsetting the rising cost of gas.

Continue reading "Chicago Gas Prices Go Up As Spring Approaches" »

Who wouldn't want to get a $6,500 tax credit this year? Apparently the many folks who can't afford to buy another house, say Chicago bankruptcy attorneys.

In November, the federal government updated its homebuyer tax credit - which was originally meant to help renters buy their first home - to include current homeowners as well. The idea was to encourage homeowners to upgrade to a new house, hopefully stabilizing prices and boosting the sluggish real estate market in the process.

But homeowners aren't biting - mostly because they can't afford to. With unemployment up, home values down and foreclosure looming, homeowners might find better benefits from another strategy: Chapter 13 bankruptcy.

Continue reading "Chicago Homeowners Find an Alternative to Foreclosure With Chapter 13" »

The recession may be good for something after all: getting rid of debt.

On the one hand, tough economic times are making consumers more reliant than ever on credit, say Chicago bankruptcy attorneys. Many of us have been piling new debts on top of the balances we carried before the recession hit. On the other hand, that extreme financial distress is encouraging consumers to do something many of us once thought unthinkable - file for bankruptcy.

And, lo and behold, we're finding out that it works.

Continue reading "More Consumers Turn to Chapter 7 Bankruptcy to Relieve Debt, Say Chicago Bankruptcy Attorneys " »

Americans spent more - but earned less - in January, say Chicago bankruptcy attorneys.

Personal spending was up 0.5 percent in the first month of 2010, according to The Commerce Department. That would seem to bode well for economic recovery, except that incomes in January rose by just 0.1 percent, much less than what economists had predicted - and the worst rate in four months.

There's good and bad news. First, the bad. As a result of more spending and less money, the savings rate has dropped. Last year Americans saved 4.3 of our incomes - the highest rate in over 10 years - but in January we only saved 3.3 percent. We might be spending more now, but without raises (and in some cases, jobs) we could eventually run out of steam, stifling economic recovery. But here's the happy news. Our savings rate is still a huge improvement over the negative rate we had before the Great Recession. And hopefully we can keep it up by slowing our spending to match our incomes.

I know it's not easy, especially when the recession - and the threat of layoffs and foreclosure - drags on. But there are ways to make saving money a little easier.

Continue reading "Chicago Bankruptcy Attorneys Say Americans Spend More But Earn Less" »