Chicago Bankruptcy Lawyer Blog

Credit cards can seem to be a blessing for someone who is struggling to get by. But as the debt mounts, you may begin making fewer payments, leading to ridiculously high interest rates. That can lead you to consider filing for bankruptcy in Chicago.

But a recent article by a debt expert Andrew Housser explains how people can avoid using credit cards as a crutch that ends up ruining their credit scores.

A Cook County bankruptcy law firm can help you if your credit card debt or other forms of debt have gotten out of control in your life. We can work to help you save your house from foreclosure or choose whether to file for either Chapter 7 or Chapter 13 bankruptcy.

But it's not always necessary to file for bankruptcy. So, consult with a law firm dedicated to helping you protect your assets. According to the article, in recent decades household debt has gone up. From 1968 to today, household debt has increased from about $1.3 billion to $800 billion. But overall revolving household debt is down 17 percent from fall 2008, just before the country's recession.

Over the last few years, you may have been cutting back on debt and trying to get it stabilized only to have it shoot back up. These are some tips to cutting back on credit card debt:

• The first step is to establish a budget and calculate how much you can spend. Live within your means and don't overextend yourself. You may choose to switch to cash only.


• Don't be fooled by credit card company rewards programs. The advertisements and TV commercials are everywhere. Sign up and get this. Use this card and be eligible for that. A recent study by the Federal Reserve Bank of Chicago found that when people sign up for a credit card that offers rewards, their spending increases.


• Borrowing money adds to your debt. Personal or home equity loans don't cancel out your credit card debt.


• Understand and analyze why you got into credit card debt in the first place so you can address your bad habits.


• Don't overspend one time because it may bite you. Just when you make a big purchase, you'll need a new transmission in your vehicle or a major roof repair on your home. It's best to stay strict with your spending.


• It can sometimes be easier to manage a little bit of money rather than worry about what to buy when you have a lot. So, spend as if you have little.


• Make wise decisions about what you "must" have.


• Rebuild credit by paying off your credit card each month. One way is to use a credit card to pay off a regular bill and pay it off quickly.


• Bankruptcy may not be the cure. Once you file once, you have to wait a certain number of years to file again, so don't use it as a crutch.


• Get help if you need it. Sometimes you can talk with credit card banks and work with them to help you.

But if you are having financial problems and you don't think the banks will listen, consult a Chicago law firm that can help assess your financial situation and make recommendations to help your future.

Continue reading "10 Ways to Avoid Credit Card Debt in Chicago" »

Many Americans are facing insurmountable debt due to medical bills. In fact, medical expenses are the leading cause of bankruptcy filings. With the outrageous cost of treatments, procedures and medications and the lack of adequate insurance coverage, more and more Americans fall into debt because of a health emergency or chronic medical conditions. Many residents may have the right intentions, attempting to pay off the debt, but simply don't have the available funds to do so.

Our Chicago bankruptcy attorneys would like you to know that there are ways to rise up out of debt and to get your life back.

While you have the option of debt settlement or debt management to help you straighten out you finances, some would argue that filing for Chapter 7 bankruptcy in Chicago is the most logical option of all as it can help you eliminate debt and start over with a clean slate. Even in cases where you can reach an agreement to pay the bank less than what is owed, you could end up in tax trouble as the forgiven debt will count as income for tax purposes, according to FOX News.

Filing for a Chapter 13 bankruptcy would still require that a client pay a court ordered amount of the debt. This will happen if a person does not meet the income restrictions to file for Chapter 7. But, in either case, the consumer would be afforded the significant protections afforded by federal bankruptcy laws.

In addition to helping to alleviate medical bills, filing for Chapter 7 bankruptcy can also help you to eliminate other debts including personal loans, utility bills, credit card debts, IRS debts, wage garnishments and payday loans. In some cases, your debts can be discharged in a few months. In the event of a discharge, debtors are released from personal liability for most debts and it stops creditors from taking further action against you.

Merely filing for bankruptcy protection will immediately stop foreclosure actions, creditor calls to your house, attempts to garnish wages and other aggressive tactics of debt collectors.

If you are dealing with the type of astronomical medical bills that frequently accompany a medical emergency, we urge you to contact an experienced bankruptcy lawyer to find out if Chapter 7 bankruptcy is the debt solution that may be right for you.

Continue reading "Chapter 7 Bankruptcies in Chicago often caused by Medical Bills" »

We exercise. We visit the doctor regularly. We eat healthy -- all to preserve our physical health. But taking care of your financial health is every bit as important.

The estimated credit card debt in the United States is nearly $15,000, according to Credit Cards.com. Many blame the recession, the deteriorating housing market and other financial obligations for the increased levels of bad debt in Chicago and elsewhere.

It's evident that many residents are currently struggling with insurmountable debt, including credit card debt, mortgage debt and medical bills. Many times, by the time bankruptcy becomes a consideration, your credit score has already been ruined. Consulting a Chapter 7 bankruptcy lawyer in Chicago can help you start fresh and begin rebuilding a solid credit rating.

In March alone, nearly 145,000 people filed consumer bankruptcy petitions. This number is a 41 percent increase from the near 102,000 filings in February, according to Reuters.

As a result, potential homeowners are finding it difficult to obtain loans.

"Right now, in this economy, credit is essential to getting a mortgage. There are different kinds of mortgages, but credit is a huge factor, along with the value of the property and your income," says Tracy Becker, author of the Credit Solutions Kit and founder of credit restoration company North Shore Advisory.

For those dealing with insurmountable debt, or who are significantly upside down on their home or months behind in payments, consulting with a bankruptcy attorney could be their best course of action. For others, credit score rehabilitation may still be possible short of bankruptcy.

For those who may be looking for a loan to purchase a new house, condo or apartment, it is advised you follow these simple steps:

-Establish a credit history. You need credit to get credit. Those who are new to the credit game may not satisfy a lender as they possess zero record of financial credibility. Most lenders will require that you have a credit history of at least a year prior to applying, or getting approved, for a loan.

-Know your front- and back-end debt. Lenders are interested in how you plan to deal with front-end debt. Front-end debt includes interest, taxes, insurance, loan principle. Lenders require that you show that roughly 30 percent of your gross income can go towards paying off your front-end debt.

-Try to boost your credit score. Ask if a family member or spouse will add your name as an authorized user. This can help boost your score by as much as 60 points.

Continue reading "Those Considering Bankruptcy in Chicago already have Credit Score Blues; New Beginning a Sigh of Relief" »

We previously posted on our Chicago Bankruptcy Lawyers Blog that the number of foreclosures in Chicago fell 16 percent in March when compared to March of 2010. Year-to-year comparisons don't always paint the entire picture of what is currently happening in today's market.

Chicago Breaking Business reported 2,800 properties became bank-owned in Cook County during the first quarter of 2011, indicating a 10.5 percent increase in completed foreclosures when compared to the fourth quarter of 2010.

Conversely, completed foreclosure auctions were down over 50 percent when compared to the first quarter of 2010.

Our Chicago bankruptcy lawyers know the stress that homeowners go through when they are about to lose their house. Contacting an experienced foreclosure defense attorney in Cook County can ease your mind in determining the right course of action for dealing with mortgage debt.

With the move by the government to put the kibosh on the failed Home Affordable Modification Program, homeowners are back to square one in figuring out how to cope with mortgage debt and the threat of filing for bankruptcy. The odds continue to be against struggling homeowners.

The Chicago Sun Times reports the following recent changes to foreclosure reports:

-Hundreds of houses have been added to Cook County's vacant property inventory during the first quarter of 2011.

-Overall foreclosure filings rose over 7 percent in Cook County during the first quarter when compared to January through March of 2010.

-Completed auctions rose 14.4 percent in the city of Chicago from fourth quarter 2010 to first quarter 2011.

Problems with foreclosure documentation skewed the actual statistics and caused unreliable documentation that homeowners are finally getting back on their feet again. Lower income property filings have continued to decrease slightly but wealthy areas of Chicago don't tell the same story. One prosperous area of Chicago, the Lakeview neighborhood, showed a 60.3 percent increase in initial foreclosure filings. It just goes to show that the sluggish economic recovery has taken a toll on everyone in the state.

Continue reading "Completed Chicago foreclosures rise in first quarter of 2011" »