Chicago Bankruptcy Lawyer Blog

The latest foreclosure statistics are in, and things are looking up - sort of.

The good news is that slightly less homeowners are underwater, a term used to describe when your home is worth less than what you owe on your mortgage. The amount of U.S. homeowners with negative equity fell from 23 percent to 21 percent this spring, according to a report by Zillow.com. Though it looks like a small change, it means we could see fewer foreclosures in the future, say Chicago bankruptcy attorneys.

Still, any amount of foreclosures is too many - and with more than one of every 1,000 homes being seized in the month of June, many at risk homeowners need financial help.

Continue reading "Chapter 13 Bankruptcy Is an Effective Method for Chicago Homeowners Hoping to Stop Foreclosure" »

There's a big difference between debt relief and debt relief. And no, that's not a typo.

You've probably heard the advertisements on the radio and read them on the Internet - so-called debt relief companies claim they can negotiate with your creditors in order to get your debt paid off. They promise you'll have a low monthly payment and freedom from debt in just a few years, or even a few months. How can you go wrong, right?

But just because a company has "debt relief" in its name or slogan, that doesn't mean they can get the job done.

Continue reading "Bankruptcy Can Sometimes Lower Debt When Chicago Debt Relief Companies Can't" »

There's hope for Chicago homeowners who owe more on their mortgage than their house is worth.

On Tuesday it was announced that home prices increased for the first time in nearly four years this February, according to The Standard & Poor's/Case-Shiller price index. Increasing values mean that homeowners can finally start rebuilding equity - that's the good news. The bad news is that housing prices aren't predictable, and they probably won't rise as rapidly as they once did. But who wants another bubble anyway, right?

Besides, whatever happens in the future, you're in luck just by being a homeowner - and here's why.

Continue reading "Increasing House Prices Mean Hope for Underwater Chicago Homeowners" »

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" »

Somehow our priorities got switched around during the Great Recession. Homeowners who used to prioritize paying their mortgage above all else are now opting to use that money to pay their credit card bills, Chicago bankruptcy attorneys say.

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.

Continue reading "Chicago Bankruptcy Attorneys See More Americans Paying Credit Cards Instead of Mortgage" »

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" »

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" »

Citibank is giving some 4,000 homeowners a very happy holiday.

The banking giant is suspending foreclosures and evictions for people with Citi-owned loans through mid-January. A company spokesman said the aim is to reduce stress during a notoriously hectic time of year, according to MSNBC.com. In the meantime, the bank says it's at work on alternatives to foreclosure.

Unfortunately, helping potentially 4,000 families means only helping a miniscule percent of the millions of Americans that could lose their homes in coming months. For the lucky few, it will certainly provide relief (albeit temporarily), but the rest of us are going to have to take matters into our own hands if we want a home after the holidays.

Continue reading "Some Home Foreclosures on Hold for the Holidays" »

Even though it's December, some folks are hearing a different kind of jingle bells - the sound of their phone ringing off the hook with bill collectors on the line.

When you're late with payments on your debt, the bank doesn't care that it's the holiday season. Forget peace and goodwill towards men - collectors are not going to give you a moment's rest until they collect your money. After all, it's their job to bother you. But even though it may not feel like it, you do have rights. If harassment from bill collectors is getting out of hand, you might be able to put a stop to it with help from a bankruptcy attorney.

Continue reading "Bankruptcy Can Stop Creditor Phone Calls" »

A growing number of Americans aren't going to be home for the holidays this year - and it's not because they're traveling.

Despite news that the economy is under recovery, foreclosures are again on the rise as a growing number of borrowers with good credit and fixed-rate loans default on their mortgages. It's just the opposite of what triggered the recession - when borrowers with bad credit began defaulting on subprime mortgages with adjustable rates.

So what's going on? Homeowners are simply running out of money. Chalk it up to too much financial stress for too long. Some folks were laid off months ago and are still out of work - and out of cash - today. Others are growing weary of bearing the burden of debt. Economic recovery might look good on paper, but families across the country are still suffering from the recession. To make matters worse, the holidays are fast approaching - and that means more spending.

But fortunately there's a way to save your house, whether you've missed your first mortgage payment or the bank is already threatening to foreclose.

Continue reading "Mortgage Defaults Increase Despite News of Economic Recovery" »

Sometimes finding help is as easy as asking for it.

Uncle Sam heard our cries for help loud and clear - in one particular case, at least. With the housing and job markets lagging behind recent economic progress, Congress has just opted to expand a popular homebuyer tax credit and continue handing out unemployment checks.

So what does that mean for you? If you're in the market for a house, you could still be in line for the $8,000 tax break that was originally set to expire at the end of the month. And if you live in a home you've owned for five years or more, you're now eligible for up to $6,500 off your taxes. Without a job? Unemployment will be extended by another 14 weeks (20 weeks in states with unemployment of more than 8.5%).

Once upon a time, Americans lost their homes, cars, possessions and reputations because they were too embarrassed to seek help. But that's changing - help is coming to you. You just have to keep your eyes open.

Continue reading "Uncle Sam Extends Homebuyer Credit, Unemployment Checks " »

The economy is picking up momentum, but it's not necessarily going to be a smooth ride.

Case in point: sales of new homes recently dropped for the first time in six months. Until now, home sales had been on the upswing since the market hits its roughest patch this January.

You can blame the decline on the fast-approaching expiration date for a temporary homebuyer tax break. The credit, which gives qualified homebuyers a tax break of up to $8,000 for their purchase, ends Nov. 30.

That might seem like bad news for wannabe homeowners - and for the economy - but it shouldn't mean the end of opportunity. Right now, Congress is debating whether to extend the credit through next March, fading it out slowly after that. Besides that, mortgage rates are the lowest they've been in years and there is no shortage of affordable homes on the market. And maybe most significantly, there are other ways to save up for a house - including bankruptcy.

Continue reading "New Home Sales Fall While Congress Debates Extending Tax Credit" »

Personal bankruptcies are on the rise, according to the American Bankruptcy Institute - and there's a reason that might actually be a good thing.

Obviously, filing for bankruptcy isn't ideal. In a perfect world, we'd all be able to overcome our debt burden by making a budget and sticking to it. Actually, in a perfect world, we wouldn't have a debt burden to speak of - hey, we'd probably be rich. But this is real life. And when you're talking about debts of $10,000, $20,000 or more, freeing your finances isn't so simple.

A 2 percent minimum payment on a 20K debt is $400 a month. That's $400 that can't go towards the mortgage, utilities or your car payment. Combine that with a lackluster economy that's not exactly encouraging cost-of-living increases and you get what feels like a hopeless situation.

So what's the good news? More people filing for bankruptcy means more people overcoming their troubles to beat debt.

Continue reading "More Consumers Turning to Personal Bankruptcy" »

When you have a headache, you take Tylenol. When you're cold, you throw on a jacket. When faced with common problems, most folks opt for the most obvious solutions. Except when it comes to getting out of debt.

For some reason, the vast majority of Americans will let themselves suffer for years before they consider one of the most effective, logical solutions to financial troubles - if they consider it at all. I'm talking about bankruptcy.

Many people think of bankruptcy as a last resort - something they'll do when they hit rock bottom. But why let yourself continue on a downward spiral when you could start your journey towards a brighter future right now?

Continue reading "Is Bankruptcy Your Best Debt Solution?" »

Imagine having the best interest rate, decent loan terms and an affordable payment - but still losing your home to foreclosure. It might sound nonsensical, but it's happening to millions of Americans right now.

Rates are the lowest they've been in years. Uncle Sam has coughed up $75 billion in taxpayer money to encourage banks to modify mortgages (though, unfortunately, it's often more lucrative for banks to keep you delinquent). But foreclosures continue to rise because of a simple fact: Americans are in the hole.

Most of us have tens of thousands of dollars worth of credit card, medical and IRS debt. To make matters worse, the cost-of-living is going up while unemployment is on the rise. Our wallets are shrinking faster than ever - and we have to decide how to allocate what's left.

Continue reading "Bankruptcy Stops Foreclosure By Getting to the Root of Mortgage Problems" »