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.
If you want to take advantage of lower fees, maybe this is the excuse you need to finally lower your debt and take back control of your financial life. The simple solution is to lay off the credit card and start paying more than the minimum on your bills each month. Pretty soon, you'll see a smaller balance and less interest. Eventually, your payments will shrink and you'll have extra money in your pocket each month.
But if that's easier said than done, bankruptcy might be just the boost you need. Filing for bankruptcy can help you lower - and even discharge - debt based on your individual situation. To get an idea of how bankruptcy can make debt relief more manageable, why not try out a free one-on-one debt analysis with a professional Chicago bankruptcy attorney? When you get rid of debt, you won't need to worry about fees and penalties - you'll be too busy enjoying your financial freedom.
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.
Then of course, you can make a few tweaks to your current budget to make it a bit more flexible. You know, try to bring coffee from home instead of swinging through the Starbucks drive-thru every morning. Maybe make those manicures a special treat instead of a weekly splurge. Or how about this trick for saving enough to cover rising prices without much effort: when you pay cash and get back a five dollar bill, put it in the back of your wallet and vow not to spend it. You'll have a nice cash cushion before you know it. And if five bucks seems a little too ambitious for you, start small with quarters - anything is better than nothing.
Then there's the big one, the quickest, most efficient way to find more money each month. Eliminate your debt. The less debt you have, the less payment you have to turn over every month. So you'll be in charge of your paycheck, not your creditors.
Easier said than done, right? Well, that depends on how you do it. If you can make enough budget cuts to afford making more than the minimum payment each month - which, by the way, is the only way to make sure you pay enough to lower your balance, not just cover interest - then congratulations. You either don't have very much debt, or you have incredible self-discipline. But if pinching pennies isn't cutting it, don't give up - get a better plan. Bankruptcy has helped thousands of people in Chicago and beyond find financial freedom by providing a truly affordable payment method as well as protection from foreclosure.
Learn more about bankruptcy for free when you sign up for a personal debt analysis with one of our Chicago bankruptcy attorneys. You can't control gas prices, but you can control your debt.
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.
Instead of jumping into another mortgage, why not secure the one you have? If you're having trouble making your house payment, Chapter 13 can offer a clear solution. Often times, mounting credit card debts make it difficult to pay the bills. With Chapter 13, your payments will be adjusted to an amount you can afford. Meanwhile, you'll be protected from foreclosure.
That's right, Chapter 13 has the ability to legally stop the foreclosure process, even if it's already started. Why wait until the real estate market takes its toll - and your house? Find out if you're a candidate for Chapter 13 bankruptcy at no cost when you try a free one-on-one debt analysis with a DebtStoppers bankruptcy attorney in Chicago.
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.
There's another reason that Chapter 7 is growing in popularity. It can help you eliminate the debt that's dragging you down even if you have little to no income. That's right, if you've been unemployed, if you've been living paycheck to paycheck, if you've had to take a pay cut, you can still eliminate unsecured debts with Chapter 7 bankruptcy. And you can often do it in just months - in some cases, weeks.
Of course, maybe you do have a steady job but the economy combined with your debt is making it difficult to pay the mortgage every month. You've got another option - Chapter 13. Filing for Chapter 13 can legally prevent your house from going into foreclosure while you find an appropriate payment plan for your debt.
Many folks avoid bankruptcy because they find it overwhelming. But the truth is, it's the exact opposite. The right bankruptcy plan can simplify your life by freeing you from the responsibility of debt. Find out how bankruptcy can change your life when you sign up for a free one-on-one debt analysis with a Chicago bankruptcy lawyer. And join millions of other Americans who have turned a bad economy into a fresh start.
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.
Next, look at how you can make your necessary expenses cheaper. For instance, challenge yourself to swap out half the name brands you buy at the grocery store for generics. Or ask your doctor about switching to a generic brand prescription. Try to drive the speed limit and get regular oil changes to keep your car burning fuel more efficiently - and to decrease the need for expensive repairs. Try to bring your lunch and coffee from home and cook your own dinner at night - it's cheaper and healthier than eating out.
Of course, sometimes the hardest part isn't identifying where to save - it's getting into the habit of stowing away the money. Fortunately, automatic payments make it easier than ever to stick with a budget. Consider scheduling a certain portion of your paycheck to be deposited into your savings account each payday. You won't even have to think about it. Saving doesn't have to be a chore. But if you've made the cuts, stuck to a budget and tried automatic saving and your finances are still in trouble, it sounds like debt is derailing you. Bankruptcy can give you a realistic way to control your debt and get your financial life back on track. Find out how for free with a complimentary personal debt consultation from a Chicago bankruptcy attorney.
The last of President Obama's credit reform measures went into effect Monday. And here's some of the good news.
• Your creditor can no longer raise the rate on an existing balance - assuming you make your payments on time - so if you normally pay 14% on a $10,000 debt, you don't have to worry about suddenly paying 24%.
• Creditors can no longer charge you for exceeding your credit limit, unless you opt in for this service.
• Creditors must give 45 days notice before making certain changes to your account, like raising rates or fees
• You must receive your bill 21 days before it's due
• If you have multiple lines of credit with different interest rates on a single card - for instance, one for cash advance and another for purchases - creditors must apply any payment over the minimum to the balance with the highest interest rate (instead of the lowest rate, as they used to do).
Now here's the catch - and how you can make it easier on yourself.
If you pay just the minimum balance on a card with multiple lines of credit, creditors can still choose where to apply that payment - and you'd better bet they'll apply it to the balance with the lowest rate. And as for that 45 day notice, creditors can still lower your limit or even close your account sans notice.
Maybe the moral of the story should be, you can't teach an old dog new tricks. No matter what kind of reform we enact, credit card companies are still going to find ways to charge fees. But by paying close attention to your balance, making sure to pay your bills on time (which should be easier than ever) and paying more than the minimum whenever possible, you can keep your credit in good shape, whatever the latest reform may be.
If you can't seem to control your credit spending - either out of habit or due to circumstances beyond your control - your debt might be getting in the way. Lowering debt through bankruptcy can lower the amount of interest you owe, freeing up more money every month and reducing your reliance on credit. Find out more for free when you try a complimentary personal debt analysis with a Chicago bankruptcy lawyer. Maybe it's time to start your own reform - and say so long to debt.
Uncle Sam has $300 million in stimulus money, and he wants you to buy a new fridge - or washer, dryer or HVAC, according to Chicago bankruptcy attorneys. The point, of course, is to encourage consumers to start spending - but also to replace old, outdated appliances with new, energy-efficient ones. Modern washing machines, for instance, use about half the water as their older counterparts. They also squeeze out more water during the spin cycle, meaning you'll need less energy to dry your clothes as well.
If you're in the market for new appliances, this might be the time to do it. However, it's important to weigh the pros and cons of the rebate program - especially if you're already struggling to make ends meet without a new fridge to pay for.
If you've got enough cash to replace an appliance, it might be worth it for you to do it now - you'll save money today and save energy well into the future. That said, if you've got a machine that works perfectly right now, you shouldn't feel obligated to strain your finances in order to get that rebate.
As with most sales, appliance rebates are only a good deal if you already planned to purchase - and know you can afford - the discounted item. Otherwise, your risk adding to your credit card debt - and that means more interest for more months, which could eventually cancel out any rebate. The best way to save money isn't to look for sales and refunds - it's to find ways to stop losing money. And paying interest on debt is one of the fastest drains on your paycheck.
Fortunately, bankruptcy offers a way to plug your spending leaks by offering an affordable, realistic way to pay down - or even discharge - debt. Want to find out more? It's free when you sign up for a complimentary personal debt analysis with a Chicago bankruptcy attorney. A new washer would be nice - but washing away debt would be even nicer.
Many banks are sending out letters urging customers to sign up for overdraft protection, a program that allows your bank to authorize a debit purchase - even if there's not enough money in your account to cover it. Some letters are going so far as to threaten customers, warning that their debit cards won't continue to work unless they contact their bank immediately, according to the New York Times.
With bold font and terms like "emergency" and "contact us immediately," these messages can be unnerving - not to mention confusing - for folks who frequently rely on a debit card to make purchases. But their purpose is actually very simple - they're advertisements. And you shouldn't fall for them. Overdraft protection isn't about saving you the hassle of overdrawing; banks want you to sign up so they can charge a fee each time they authorize money because you don't have enough to cover a purchase. Here's the real story on overdraft protection.
This summer, consumer protection laws go into effect, forcing banks to get a customer's permission before enrolling them in overdraft protection. It might not seem like a big deal to you and me, but it is to banks. Why? Because last year they made $20 billion from overdraft protection fees. They don't want to stop making money off of us - and they're doing whatever they can to convince us it's in our best interest to keep paying them.
Don't listen. Is it really worth it to lose $50 just so you don't have to come up with another form of payment? And if you're worried that you don't have enough in the bank to get by without overdrawing, it sounds like you're overwhelmed by debt. Bankruptcy can be a permanent way to lower - or completely eliminate - debt. Find out if bankruptcy is your path to financial freedom with a free personal debt analysis courtesy of a Chicago bankruptcy attorney.
In at least six states, people who buy their own insurance could see rates rise by at least 50 percent, according to the Associated Press. And they're not alone - employees with insurance plans through work have been seeing 5 percent more on average amounts carved out of their paychecks.
Americans deserve affordable health insurance, whether it comes from a government option or not. But in the meantime, some insurance is better than none - and canceling your plan to save money might be a risk you can't afford. Unless you can accurately predict the future, gambling that you won't get sick is a bad bet. An unexpected illness or hospital stay can cost you thousands more dollars than you'll save by not paying your monthly premium - in extreme cases, it could cost you millions. Fortunately, there are ways to lessen the pain of paying for health insurance so you can afford to be protected.
Save at the doctor
If you're buying name-brand prescriptions, chances are you can get essentially the same thing for less than half the price. All you have to do is request a generic alternative. When you're faced with costly procedures, bring up your financial hardship. You might be offered a payment plan or lower rate. It doesn't hurt to try.
Look for help
Many clinics offer programs that let you make payments as you can afford them. You can look for one in your local area by going to www.ask.hrsa.gov/pc. Meanwhile, look into whether you qualify for Medicare or Medicaid at www.cms.hhs.gov.
In the meantime, it can't hurt to free up some more money to cover your payments - not matter how high they are. One of the fastest ways to increase your income is to decrease your debt. The more you can pay each month, the less you'll have left to pay interest on - saving you big bucks in the future.
Can't seem to make a dent in your debt burden? Consider bankruptcy. Filing for bankruptcy can be the most effective way to clean up your finances, since it offers a chance to pay down or eliminate your debts. And it's free to find out if bankruptcy is right for you when you sign up for a free one-on-one debt analysis with a Chicago bankruptcy attorney. Nobody likes to think that we'll end up getting sick. But if we do, we should focus our energy on getting healthy again - not on climbing out of debt.
]]>Not necessarily, say Chicago bankruptcy attorneys. Unemployment benefits sure come in handy when you need to put food on the table. But they can also cost you. As it turns out, unemployment benefits are taxable after the first $2,400 - or $4,800 per married couple. After that amount, you'd better start treating those payments as income, because they'll be taxed that way. Not sure how much you received last year? You should receive a Form 1099-G in the mail, which you'll need to report on your 1040.
Fortunately, there are ways to offset some of the damage - and not just of unemployment benefits, but of any surprise tax.
]]> For instance, expenses you incurred while looking for a job - traveling to interviews, the cost of printing and sending out resumes or the price of using a job agency - are tax deductable if they add up to at least 2 percent of your gross income. If you're not already, start saving receipts and logging every mile you travel.But deductions only cover some of the cost. The best way to reduce the impact of tax time - or any surprise expense - is to be prepared. Whether it's unexpected taxes, medical bills, or a sudden loss in income, chances are you're going to someday need some extra cash to draw on. Not only will having cash handy make things easier financially, but you won't have to exacerbate an already stressful time by freaking out over where to find more money.
If you don't already have a cash cushion, it's time to stop making excuses. Try to designate a certain amount each paycheck to be deposited into an emergency savings account - ideally, you'll save 10 percent of your income but even five bucks is better than nothing. You can increase your savings as you can afford it. The point is to make it a habit. This step may be even more important than paying down debt, as having an emergency fund can prevent you from taking on even more debt should an emergency actually arise.
Speaking of debt, if your bills are so high that you can't afford to start building up a cash cushion, you know that you have too much of it. Chapter 7 bankruptcy is often a good choice for the unemployed because it can discharge unsecured debts like credit card, utility and medical bills in as little as a few months - but it's not your only bankruptcy option. Find out if there's a bankruptcy plan right for you with a free personal debt analysis from a Chicago bankruptcy attorney. This is one benefit you won't have to pay for.
]]>Starting Feb. 22, members of the under-21 crowd won't be able to get a credit card unless they can either demonstrate an independent source of income or provide proof of parental permission.
Overall, it's probably a pretty smart law - but I've got a couple complaints. First, that they didn't pass this thing sooner, before me - and my first credit card - went to college. Second, that it really only puts off the inevitable. Sure, relying on a checking account - and being limited by the cash in that account - is a good experience. But chances are, most kids are going to end up with at least one credit card someday. Regardless of whether you get that card when you're 15 or 40, you're going to have to learn how to manage it to avoid debt.
Of course, credit cards aren't all bad. Used responsibly, a card is the most important step in building credit history. If you don't have any form of credit until you're 21 or older, you might not have a lengthy enough history to buy a car. In the end, it's about compromise.
If you've got kids, the way you handle your credit could influence their financial future. Using cash when you can to ensure you don't overspend and get stuck in the credit cycle can benefit the both of you. But even if you don't have kids to worry about, it's worth it to reevaluate your spending habits every now and again.
Often times, making a few changes to your budget - cutting out that special cable package, for instance - is all you need to more easily pay more than the minimum each month. Other times, you might need a jumpstart to help tackle a particularly large debt. Bankruptcy can be just that start. Find out if bankruptcy can make debt relief a reality when you sign up for a free one-on-one debt analysis with a DebtStoppers bankruptcy attorney in Chicago.
But whether you think of Valentine's Day as the most romantic day of the year or just another excuse to spend money cooked up by card companies, you can make the most of the holiday without going broke - even if you're in debt, according to Chicago bankruptcy attorneys.
]]> For the diehard romantics out there, remember that it's the thought that counts. You shouldn't feel obligated to spend more than you can afford - if we bought extravagant gifts for every holiday, we wouldn't have anything left.Chocolate gets eaten and flowers wilt. If you're going to buy something, make sure it's something that lasts - and preferably, that's useful. For instance, try buying something your honey needs anyway - the element of surprise might make even a new pair of shoes seem interesting. Or how about framing a photo of the two of you together - or putting together a scrapbook of your last vacation? If you want to save a ton, cook a romantic dinner for two (or your whole family) instead of going out to eat - chocolate-covered strawberries, anyone?
Even if Valentine's Day isn't your thing, you can still show yourself some love this holiday by vowing to improve your finances. Are you losing sleep because you're afraid the mailman might bring a foreclosure notice any day now? Are you stressing because you can't afford to pay cash for even the most mundane purchases - and thus have to keep adding to your already large credit card debt? Why keep torturing yourself?
The most practical way to eliminate debt is by finding ways to cut out spending. When you spend less than you earn, chances are you'll have enough in the bank to cover everyday stuff like gas and groceries. Once you stop growing your credit card balance, the interest you owe will also level off - and you can apply the savings towards actually paying off debt.
Of course, if you've already cut back on spending - or if circumstances beyond your control are preventing you from doing so - and you're not making a dent in your debt, you might need a little assistance. And often that means a bankruptcy plan. When you file for bankruptcy, an automatic stay protects your home from foreclosure. In the meantime, you can reduce or eliminate debts with an affordable payment plan. Want to find out if bankruptcy is right for you? It's free when you sign up for a personal debt analysis with one of our Chicago bankruptcy attorneys. Look at it as our Valentine's present to you and your bank account.
In a way, it's a strategy that makes sense. One-quarter of American homeowners are underwater - meaning they owe more on their house than it's now worth. Consequently, they're wary of putting money into a home with no equity because doing so feels futile. Credit cards, on the other hand, seem to pay off. We can use plastic to buy necessities like groceries, gas, and clothes. And for those of us who have lost our paycheck or just aren't bringing home enough money, credit cards enable us to cover what we can't afford with cash (while our debt grow in the meantime).
But just because one solution seems easiest doesn't mean it's the smartest - or that there isn't a better strategy out there. There are consequences whether you choose to default on your mortgage or your credit.
The perfect solution would be to rely less on your credit card. With less on your bill each month, you'll have more money to put towards your mortgage. You might still be underwater, but remember - a roof over your head (a roof that you own, nonetheless) counts for something. Of course, you'll still have that credit card debt to tackle when you get things under control.
That said, people aren't perfect - and our solutions often aren't, either. You just have to do the best you can. Bankruptcy is often the most realistic solution for dealing with debt. Specifically, Chapter 13 bankruptcy has the potential to stop foreclosure while you come up with a more affordable payment plan for your house. Chapter 7, on the other hand, can reduce or eliminate unsecured debts like credit cards.
No two financial situations are alike. To find out if there's a bankruptcy plan right for your problems, sign up for a free personal debt analysis with a Chicago bankruptcy attorney. Because sometimes your biggest priority should admitting when you could use a little help.
Sometimes it's all too tempting to drown out nagging worries or unhappy experiences by trekking to the mall for something bright, shiny and new. And to some extent, it works - if you make sure to keep your purchases realistic and within your budget, say Chicago bankruptcy attorneys.
Problem is, when we're not feeling our best our judgment can get clouded, making it harder to stick to everyday limits. Have you heard of emotional eating? Well, this is emotional spending. And it can add up - especially if you're already in debt. Though it's no simple task to stop something you do unconsciously, you can change your behavior fairly easily before it happens by identifying - and learning to avoid - certain triggers.
Avoid temptation
Do you drive by the mall on the way home from work? Consider trying an alternate route - or at least being extra careful when you know you're feeling emotional. Do you have a problem with online shopping? Stop yourself from browsing the Internet when you're feeling bored. It's hard to say no when you're being bombarded with ads telling you how much you need so-and-so product. Consider unsubscribing to catalogs and e-mail lists that are only going to introduce you to new things you don't need.
Don't be too hard on yourself
If you treat yourself to something small occasionally, you might not feel so wound up when you're having a bad day. Another problem occurs when you overspend and feel regret - causing you to overspend again. Don't beat yourself up - you can always return your purchases.
Emotional spending can be conquered, but it can also be a hard habit to break. You know it's time to try a new tactic when you can't seem to curb your impulses - or if past spending sprees have left you with so much debt your better behavior doesn't seem to make a difference. In that case, bankruptcy might be your best shot at getting your finances back on track.
Could bankruptcy be a good fit for you? Find out for free with a one-on-one debt analysis from a Chicago bankruptcy attorney. Improving your finances can also improve your mood - minus the pricey retail therapy.
This week's depressing newsflash informed us that employers cut 20,000 jobs last month - more than economists expected, and enough to threaten a recent dip in unemployment and shake up the stock market, according to Chicago bankruptcy attorneys.
The good news? Getting that loan might not be so difficult. Banks have are finally stopped tightening the standards they've been placing on most loans - a sign that credit woes might finally be easing. And according to the Fed, far fewer banks believe the value of the loans they hold will continue to deteriorate. Of course, this doesn't mean banks are easing up on any of the restrictions already put in place - but you can't win them all.
Economic recovery might not be happening overnight, though it is likely in the works. But you can use this time to your advantage. Why not get your finances back in shape so when the economy does pick up, your luck will, too?
Stop using credit for smaller purchases like groceries and gas - use cash instead. Think of all the money you'll save if you don't have to pay interest on your everyday life. Think you can't afford life without plastic? Try to find ways to cut back so you're not spending more than your paycheck - a common tendency with credit.
Of course, not all debts are created equal. If you've tightened your belt but you're still struggling to make ends meet, there might be another solution - bankruptcy. Bankruptcy has the ability to reduce or eliminate some of your debt, depending on your situation. Even better, it also has the potential to stop foreclosure, especially helpful if you're behind on the mortgage because of overwhelming debt. And at DebtStoppers, it's always free to find out if bankruptcy is right for you with our complimentary personal debt analysis. Why not let our Chicago bankruptcy lawyers help you find your own economic recovery?