Chicago Bankruptcy Lawyer Blog

The Illinois Attorney General recently expanded its probe of alleged "robosigning" of mortgage foreclosure documents, announcing subpoenas to two Florida-based mortgage servicing support providers, the Chicago Tribune reports.

This is welcome news for many of the thousands of homeowners who are dealing with foreclosure in Illinois. Chicago Foreclosure Defense Lawyers have years of experience helping people avoid foreclosure through bankruptcy. Many homeowners want to save their house from foreclosure, but think the only way to do so is to fight their foreclosure in the state court. Not true. Filing for Chapter 13 bankruptcy in Chicago immediately stops foreclosure and makes creditors disappear.

"Robo-signing" has become a national phenomenon where companies hired by banks and lending institutions sign documents without even checking them for accuracy and sign the names of bank officials who never saw the documents. In many cases, these documents include incorrect numbers regarding how much a person owes on their house or how much they have paid. In some cases, the bank may not even have the right to pursue the foreclosure action.

The Illinois Attorney General has asked two of these companies that weren't already under investigation for every affidavit used in an Illinois foreclosure or bankruptcy case since Jan. 1, 2007 and the names of all employees who signed affidavits since then, according to the Tribune. The companies have until mid-June to respond.

All 50 states have been investigating financial institutions and mortgage servicers alike, with differing levels of intensity and aggressiveness. According to RealtyTrac, an online foreclosure marketing company, there were 5,241 new foreclosures in April in Cook County alone and more than 10,000 statewide.

This shows that many people are falling behind on payments because of the lag in the economy and banks are sweeping in and trying to take away people's houses. The biggest causes of debt are unexpected medical bills, job loss and predatory credit card companies that charge ridiculous interest rates and fees.

But while the situation seems bleak, there are ways to protect your home from foreclosure. Filing Chapter 13 bankruptcy will immediately stop the foreclosure process, no matter how long the house has been in foreclosure. It will also stop creditors from calling and bugging you, your friends and family and company.

What this area of law does is it allows consumers to recover from debt by creating a payment plan so they can keep large assets, such as a house and vehicles. Bankruptcy is one area of law where the government has decided to help consumers.

Bankruptcy is especially necessary in the current economy and recovery from the Great Recession, when many people have fallen into a position where they may no longer be able to make house payments or meet other obligations.

Chicago Foreclosure Defense Lawyers have been able to help many people recover from financial despair through bankruptcy and other means. If you, a friend or family member is struggling to get by and needs help, take our free debt analysis today.

Continue reading "Illinois Attorney General Goes After Robo Signers in Chicago Foreclosures" »

The New York Times reports that as the Great Recession ravaged the country's housing market, the percentage of homeowners dropped sharply from 69.2 percent in 2004 to 66.4 percent now. Experts say the levels are akin to where they were in 1998 and could decline to levels seen in the 1980s or earlier.

What this tells Chicago Bankruptcy Attorneys is that while millions of people have used bankruptcy laws to their advantage, there are millions still who have not -- despite faced with losing their homes. Home prices dropped again recently -- 4.2 percent in the first quarter, according to the S&P/Case-Shiller National Index -- illustrating that the housing market woes may continue for some time.

Housing is locked into a downward spiral, analysts say, because people are unemployed, in foreclosure or trapped in homes that are worth less than the mortgage. But another factor is that the disappointment in the housing market collapse has caused many people not to want to own. Still, with it being the cornerstone of the American Dream, real estate experts believe that people will soon go back to the mentality of wanting their own house.

There are many people throughout Chicago who fall into one of the categories outlined in The New York Times. Many people are trapped upside down in their mortgages and are struggling to find a way out. Many hope their loans can be modified to reflect the current value of their property, but their bank is unwilling to help.

Many people are stuck in a frustrating position because of the housing market collapse. But, while they may have just started missing payments on their house or because of unemployment are months behind, Chapter 13 bankruptcy in Chicago may be the right choice.

According to March statistics by the United States Bankruptcy Court, nationwide Chapter 13 filings rose 5 percent to 438,788 from the 415,966 bankruptcies filed in the 12-month period ending March 31, 2010. The number of Chapter 13 filings came in second only to Chapter 7 filings.

Chapter 13 bankruptcy allows homeowners to potentially keep their homes and other large assets, by working out a payment plan over a 3- to 5-year window to satisfy their debts. Filing for Chapter 13 bankruptcy automatically halts any foreclosure process that a homeowner may be going through, so it gives instant protection. And throughout the bankruptcy process, homeowners are able to stay in their houses.

Many people still think that bankruptcy is embarrassing and hurts a person's reputation. Consider this: Donald Trump has filed for bankruptcy four times! Many people use the bankruptcy laws to their advantage because it's one set of laws that are designed with the everyday person in mind. They are designed to allow people a second chance and the opportunity to get their finances in order.

Continue reading "American Dream of Home Ownership a Challenge in Chicago" »

As The New York Times recently reported, the country's most powerful banks aren't trying to fix the problems with robo-signing and shady business practices in foreclosure cases by actually fixing them, but instead by trying to pay off the government.

Chicago Foreclosure Attorneys have watched as the country's financial crisis started in the mid 1990s, but didn't rear its ugly head until recent years, when the housing market collapsed. Home prices steadily increased in from 1995 to 2001 and as they did, lenders relaxed their standards and let people borrow against their home's value. But when values plummeted as the bubble burst, millions of homes lost value, leaving even honest homeowners in Illinois upside down in their mortgages.

But it is possible to stop foreclosure in Chicago. Consulting with an experienced foreclosure attorney in Chicago can make the difference between dealing with unmanageable debt and enjoying the freedom of taking control of your finances.

As the story details, the banks controlling about two-thirds of the mortgages in the United States have offered to pay $5 billion to settle allegations of robo-signing and other shady practices like filing false documents in foreclosure cases. But the state attorneys general who have launched investigations are seeking $20 billion in payments.

The Wall Street Journal recently reported that the banks are trying to haggle over how much to pay for their abuses. After the banks offered $5 billion, the states came back with an offer of $17 billion. The states believe the banks will face a liability of at least $17 billion in civil lawsuits.

The U.S. Trustee Program, a part of the Justice Department that oversees bankruptcy cases, has asked for an additional $500 million to $1 billion in penalties, according to people familiar with the matter. Officials of the unit have raised questions in several cases over the authenticity of foreclosure documents.

All this can be good news for homeowners who are struggling to pay off their loan on an upside down mortgage. All of these problems can potentially be helpful in defense of a foreclosure. While that may be a successful plan of attack for homeowners, one surefire way to stop foreclosure in its tracks is through Chapter 13 bankruptcy in Chicago.

The way Chapter 13 differs from Chapter 7 is that it works for people who have assets they want to protect, such as houses. Chapter 13 filings immediately stop the foreclosure process and work to help the homeowner come up with a payment plan to help keep their home and other assets. The payment plan typically lasts 3 to 5 years.

In other cases, Chapter 7 Bankruptcy may be your best bet. In either case, fighting bankruptcy can permit you to remain in your home indefinitely while you work to restore solid financial footing.

Continue reading "Questionable Foreclosure Practices in Chicago put Banks on the Hotseat" »

A USA Today analysis of government statistics found that uninsured Americans leave hospitals with unpaid bills of up to $49 billion per year.

Medical bills are the leading cause of bankruptcy filings in the United States, a Harvard University study found in 2009. According to Bloomberg Businessweek, 78 percent of the 2,314 bankruptcy filers in the study had medical insurance at the start of the illness. The study revealed that those people had more than $5,000 in medical bills, mortgaged their home to pay for the bills or lost significant income because of an illness.

Chicago bankruptcy lawyers know the frustration that people have when a catastrophic medical emergency threatens to wipe out their savings account or sends them spiraling into uncontrollable debt. Consult with one of our dedicated bankruptcy attorneys today to figure out how to salvage your financial future.

According to USA Today, on average, uninsured families can pay only about 12 percent of their hospital bills, compared to families above 400 percent of the poverty level, who pay about 37 percent of their hospital bills in full. A family of four with a household income of $88,000 would be considered 400 percent above the poverty rate.

Researchers also found that most people who have no insurance also have no savings, and about 33 percent have no financial assets.

According to the American Bankruptcy Institute, more than 80,000 people in Illinois filed for bankruptcy in 2010. That is a 94 percent increase from 2007, when about 41,456 people statewide filed for protection under bankruptcy laws.

It can be difficult to fend off calls from hospitals, specialists and other medical professionals when you're trying to recover. A bad accident that wasn't your fault or an unexpected medical emergency can leave you reeling in debt. But the good news is you don't have to do it alone.

Whether you need to consider Chapter 7 bankruptcy or Chapter 13 bankruptcy, let Chicago Bankruptcy Lawyers help you use the law to your advantage. Take our free personal debt analysis and then call. Filing for bankruptcy may be an avenue to get rid of medical bill debt that you can't seem to get away from.

Continue reading "Medical Bills Leading Cause of Chicago Bankruptcy Filings" »

A recent advice column on creditcards.com tells readers it would be better to slowly pay off creditors than to file bankruptcy if you have a low credit score.

But Chicago Bankruptcy Lawyers disagree with this assessment and believe that continuing to drown in credit card, medical bill or other debt and struggling to keep your head above water is poor advice. For most, their credit has already been temporarily ruined. And for many, they will only prolong the misery before inevitably seeking the solace available through bankruptcy protection in Illinois.

Many Chicagoans are trying their best to stay afloat on their mortgages, but have fallen behind because of tough economic times. Consulting with a team of experienced bankruptcy lawyers in Chicago is the first step in assessing what will be your best plan financially.

According to the advice column, the question is from a woman who has a low credit score and wants to clean it up. She is wondering whether to file for bankruptcy to wipe it clean or continue paying off three collectors at a time in order to increase her credit score.

The column's writer, a financial adviser, tells the woman that bankruptcy won't improve the woman's credit score, but it won't make it drop, either. The writer tells the reader that continuing to pay creditors will eventually, over time, help her credit score.

But so will bankruptcy. And much faster. A 700+ credit score several years after bankruptcy is possible for many people.

For one, the column should be met with skepticism because it is written on creditcards.com, a website designed to help people find credit cards. One benefit of bankruptcy to consumers is it immediately stops creditors from coming after consumers, so credit card companies wouldn't want consumers to know that information. And considering there was nearly $792 billion in credit card debt in 2010, according to economywatch.com, credit card companies want to keep people out of bankruptcy court.

But the notions that a person's credit score doesn't improve after bankruptcy or that they won't be able to obtain credit after filing for bankruptcy are false. Our firm has seen many people receive credit card offers with little or no hassle following bankruptcy. Some people can even get loans for a new house within a short period of time.

Consumers facing piles of debt know how disruptive creditors and collection agencies can be. They call all day, send e-mails, bother family members and co-workers and can make life difficult. A person may be able to make payments for a while, but what happens when the car needs a big repair or someone in the family goes to the hospital? Then you're back in the same position you were in before you started making payments.

Credit counseling and debt payment services try to tell consumers they are great alternatives, but often using those services still ruins a person's credit and they have to pay for those services on top of it all. Bankruptcy, meanwhile, can create a clean break from creditors and allow people to take control of their finances and make their financial future a brighter one.

Continue reading "Chicago Bankruptcy a Better Option Than Debt Payment Services and Credit Counseling" »

Marketwatch.com reports that Americans have become more diligent about eliminating debt and increasing savings at the same time that the federal government continues to expand it.

Chicago Bankruptcy Lawyers understand the challenges and stress facing families struggling with unmanageable debt loads. The reality is that ever-increasing debt can make life devastating and cause not only financial problems, but also mental and physical hardships.

Between the 1980s and 2000s, Americans cut back on debt and in the same time period the federal government increased its debt from $1 trillion to $14.3 trillion. The government is again having to decide whether to increase the debt ceiling to keep itself running. Some estimates show the country's debt increases $2.5 million every minute.

While that may make your personal debt situation seem like nothing, your "debt ceiling" is set by lenders and banks, who employ creditors to collect unpaid loans. If your situation spirals out of control, you can expect a battle to fight off foreclosure and bankruptcy. Trying to balance your personal budget and paying off debt is the first step to trying to get back on track, Marketwatch says.

Valiant attempts to consult with credit counselors and cut out unneeded expenses are good plans to cutting back on debt, but often it isn't enough. That's when Chicago bankruptcy attorneys can be helpful in providing you direction on how to eliminate your debts.

Bankruptcy doesn't have to be a scary word. While it has a negative connotation, Chicago bankruptcy attorneys have seen this legal process save many houses from foreclosure and eliminate years worth of debt that otherwise would have sunken a family financially.

In Chicago, Chapter 7 bankruptcy typically best works for people who meet certain income-to-debt thresholds.

Chapter 13 bankruptcy in Illinois, however, is better suited for people with a lot of debt, but who own homes and other large assets. Chapter 13 can stop a foreclosure, for instance, and help you keep your home. It requires a payment plan, usually over 3 to 5 years, to pay back your debts, but it allows you to keep your home.

Bankruptcy law is complex and relies heavily on your personal situation. There is no cookie-cutter bankruptcy advice out there. But DebtStoppers attorneys have a vast amount of experience in this area of law and are available to help you figure out the best option for you and your family.

Continue reading "Debt Levels an Ongoing Problem for Chicago Consumers and the Nation" »

While many people believe that life after bankruptcy is all no credit and no fun, it's not and walletpop.com offers five tips to rebuilding your credit after bankruptcy.

Chicago Bankruptcy Lawyers have seen how mounting debt, either from credit cards, unexpected life-altering medical bills or the loss of a job, has prevented families from continuing to make payments on their houses or pay other bills. That's why working to stop foreclosure in Chicago through bankruptcy is a critical step to saving a homeowner's property.

Chapter 13 bankruptcy in Chicago can be advantageous to people who have houses or other large assets they want to try to protect. It allows them to develop a payment plan to save those assets. Chicago Chapter 7 bankruptcy, however, eliminates all debt and permits a consumer to make a fresh start. .

The laws are designed to protect those who need help and are willing to abide by the law in restructuring their finances. The purpose is to take responsibility and move forward without languishing in debt.

According to the American Bankruptcy Institute, U.S. Bankruptcy Court for the Northern District of Illinois, which includes Chicago, had nearly 65,000 personal bankruptcy filings in 2010. That's way up from about 20,000 in 2006. Statewide, bankruptcies were up 12 percent from 2009 to 2010, The Wall Street Journal reports.

The laws are helping many get back on track. On to the tips:

Let go of the guilt and shame: As we noted, personal bankruptcies were up 9 percent in 2010. That's 1.53 million filings. While some people can feel disappointment or shame, bankruptcy filers should note that outside factors are frequently the reason for filing for bankruptcy, not a failure at running your finances. Unexpected medical bills are the No. 1 reason for filing for bankruptcy.

Reflect and Regroup: Reflect on how you got into the position of filing for bankruptcy and allow the process to help you move forward into a healthy financial future. Enlist a team of friends, family, church members, civic organizations or others who can provide support.

Create a realistic budget and pay existing bills over time: After bankruptcy, stay vigilant about your finances. Even if you have never created and stuck to a budget, now is the time. Don't buy things you don't need or splurge, but live below your means. Don't let bills linger and allow credit card company interest to hammer you back into financial troubles.

Pick a credit card that can help you rebuild credit: A secured credit card can allow you to deposit money, say $500, that acts as a spending limit. By charging small amounts and repaying the debt monthly, your credit can recover. Some people, like those who have filed for bankruptcy within the last year, may not qualify. And some secured cards charge high fees or don't report your payment history to credit bureaus.

Separate fact from fiction about bankruptcy: Many people think that filing for bankruptcy disqualifies them for getting any type of credit for 10 years. That's simply not true. Many people can get a home loan. Credit cards, car loans and other forms of credit are often available for many bankruptcy filers after the process is over.

Continue reading "Tips for Life After A Successful Bankruptcy in Chicago" »

Debt is skyrocketing in America, leaving many households struggling to make ends meet. According to economywatch.com, the Federal Reserve reports $2.4 trillion in debt, much of it unsecured in the form of credit card debt or medical bills.

If you, a friend or a family member is struggling with mounds of credit card debt don't attempt to handle it on your own. Contact Chicago Bankruptcy Lawyers and decide what your best option may be. Bankruptcy may allow you to eliminate your debts or set up affordable payment plans to pay them off.

About 33 percent of the $2.4 trillion in debt is considered unsecured debt, such as credit card debt, while the rest is locked up in loans, such as mortgages, car loans and student loans.

Here are some other debt numbers that may shock you:

• In 2006, $51 billion of fast food was charged to credit cards, which was up from $33.2 billion the year before
• The average credit card debt per cardholder is $5,100 and is expected to be $6,500 by the end of the year
• One in 10 consumers has more than 10 credit cards, while the average consumer has four cards
• One in 50 households, or about 2 million households total, have more than $20,000 in credit card debt
• About 5 percent of cardholders are 60 or more days late on payments
• In 2010, there were 115,000 bankruptcy filings in California alone. Countrywide, 1 in 160 people filed for bankruptcy.
• Alaska ($7,665), Tennessee ($7,054) and Nevada ($6,517) were the states with the highest credit card debts

But there are ways to eliminate nagging creditor calls and get your life back on track. It's possible that Chapter 7 bankruptcy in Chicago is the path that will get your family back on track. Depending on your assets, Chapter 13 bankruptcy may be best to protect your home but still eliminate debt.
To find out, take our free debt analysis and then call.

Continue reading "Chicago Bankruptcy Filing Helps Consumers Dealing with High Debt Levels" »

Banks are big businesses that we rely on to keep our money safe and our accounts secure. Many banks, despite help from the government, lose their way and need bailed out by other banks that have the finances to overtake them.

We have seen this quite often in the last few years. But transitions don't always go smoothly and many times mistakes are at the expense of the customer. Consolidations often cause errors in customer records, which have a lasting negative effect on bank clients. Bank customers who don't check their accounts routinely can find themselves in the midst of a credit debacle when applying for car loans, mortgages, or home equity loans.

Erroneous accounts lead to lenders denying loan applications for customers who wouldn't normally be denied. Chicago Bankruptcy Lawyers know that the behavior of banks has had much to do with the economic problems facing consumers. Banks have swung from free credit to no credit. Understanding your rights as a debtor is critical to protecting the financial well-being of you and your family.

The Chicago Tribune recently reported about a woman in jeopardy of personal bankruptcy after a bank take-over which ultimately ruined her credit score. A respectable business woman and entrepreneur, she discovered that her bank was double-reporting her loans to credit bureaus following a takeover of her original bank. Potential lenders denied her loan applications because on paper, she looked like she was way over extended.

Unfortunately, it's not an uncommon problem. "Bank A acquires Bank B, and during the absorbing of Bank A something goes awry and accounts get misreported to the credit bureaus," states a former executive with a credit reporting firm. The former executive personally went through the same situation and is currently serving as an expert witness in a similar case.

We posted previously on our Chicago Bankruptcy Lawyer Blog how important credit scores are when applying for loans because high ratings can ultimately save you money.

After years of fighting with the bank to repair the error made on her credit, the Winnetka businesswoman filed a federal suit. Following her first complaint over 5 years ago, she saw her FICO score fall in excess of 75 points. Then, seeking help from a credit-repair firm, she was told the errors were not fixable. In total she has five loans with the bank totaling $3.8 million but the misreporting made it look like she was over her limit on all five loans. The judge has dismissed some claims but has upheld a complaint that the bank pulled her credit report when she had not applied for a loan. Bank customers are protected by the Fair Credit Reporting Act which states credit reports cannot be reviewed without the permission of the client.

Continue reading "Chicago Bankruptcy Attorneys Warn of Risks of Bank Consolidation" »