Chicago Bankruptcy Lawyer Blog

A recent look at the most recent bankruptcy numbers shows that there was a drop in filings in the Bankruptcy Court for the Northern District of Illinois during the third quarter.

Most analysts believe that this is because creditors have loosened their standards for handing out credit. As you likely have seen in recent weeks, credit card companies have been hammering away with advertisements promising rewards, perks, and cash back deals. All of these scams are designed to entice people to use their cards and end up indebted to them.

While some people may have been able to avoid the credit card companies' efforts, others may have been trapped during the holiday shopping season. For those who have fallen into the trap and may be stuck with thousands in credit card debt, Chapter 7 bankruptcy in Chicago may be a viable option.

Our Chicago bankruptcy lawyers have helped many clients who are burdened with mounds of debt. The different forms of bankruptcy allow people in specific situations to be helped. If you have assets to keep and don't want them to be subjected to creditors, there's a form of bankruptcy for that. If you have little income and few assets, but there are things you want protected, that may be possible. Consulting with a lawyer for free is a good first step.

Let's take a closer look at the numbers.

According to the American Bankruptcy Institute, which tracks bankruptcy filings, trends and numbers, there were 13,750 bankruptcy filings in the Northern District of Illinois between July and September. That's down significantly from the 15,020 filed during the summer quarter, but higher than the second quarter of 2009 and previous years.

To compare how busy that court is compared to the other two bankruptcy courts in Illinois, the Central District reported 2,033 filings and the Southern District only 1,304. Statewide, that makes 17,573 bankruptcy filings. Compared to other states, Illinois ranked fourth highest behind only California, Florida and Georgia.

Most interesting, perhaps, is that Chapter 13 bankruptcy filings became more popular in recent months. Chapter 7 is the most popular form, but made up less than 70 percent of filings for the first time since 2010 and before that, 2008.

Chapter 13 allows people to keep their assets, including a home and vehicles, and set up a payment plan over 3 to 5 years. This can allow people to lose their debt but still keep their assets.

While the numbers are slightly down, our lawyers on a daily basis help countless clients who are struggling with debt and feel like they have nowhere to turn. Filing for bankruptcy is one way that consumers can get relief and get back on their feet. Living with debt can be stressful, frustrating and depressing. That's no way to live.

If you are struggling with debt and have exhausted all remedies you can think of, set up a consultation with our law firm. We have skilled attorneys who are eager to look at your situation and help you determine if bankruptcy in Chicago works for you.

Continue reading "Chicago Bankruptcy Numbers Take a Dip in 3rd Quarter Because of Loose Credit" »

Recently released data suggests that more than 120,000 jobs were added in November, which lowered the unemployment rate to 8.6 percent, CNNMoney reports.

This is certainly encouraging news. Our Chicago bankruptcy lawyers hope that many of the seasonal workers who were hired in retail and by companies producing consumer goods can hang on to those jobs as we get into 2012.

But for many others, jobs have been scarce. Many people have spent months or even years attempting to get a steady income. For millions of Americans, unemployment benefits have been what they live on. But whether a person is newly employed or still struggling to find work, it's likely that credit has been a crutch that is close to breaking.

Without steady income, people have relied on loans and credit cards to get by. This is a disaster waiting to happen. If the consumer has no income, they are likely getting bombarded with calls, e-mails and letters harassing them and making threats against them. If people happen to have a job, they may be in the process of having their wages garnished.

One initial benefit of filing for bankruptcy is that it stops creditors from hounding consumers. Once the paperwork is filed, creditors are no longer allowed to directly contact the borrower as all their communication goes through the court. That can be a load off their shoulders at a difficult time.

The obvious long-term benefit of bankruptcy is the ability to shed debt that has made life extremely difficult. In many cases, all the debt can be vanquished without a person losing their assets. In some cases, they may have to sell some things to pay off their debt and if they file Chapter 13 bankruptcy in Chicago, they can set up a payment plan to pay off debt.

Back to the employment numbers.

The CNNMoney story reports that experts had predicted about 110,000 jobs would be added, so the new numbers surpassed their predictions. Government jobs actually decreased by about 20,000, though private sector jobs were bumped up by about 140,000.

The majority of jobs were added in retail -- 50,000 ---and hospitality, such as hotels and restaurants -- 20,000. An interesting point to the story is that the Labor Department's numbers are adjusted to take into consideration seasonal trends, so the holiday hiring season isn't all to credit for the job growth.

Still, there are 13.3 million people out of work and 43 percent of those people haven't had a job in six months or more. Less than 1/3 of the 8.8 million jobs that have been lost in recent years still haven't been recovered.

Let's hope our country's economy keeps this momentum going into the new year and stock prices, real estate prices and numbers of hires continue to increase. This is a critical time for our nation and our Chicago bankruptcy lawyers hope the recovery continues.

Continue reading "Jobs Up, Unemployment Down, But Chicago Bankruptcy Still a Viable Option " »

It used to be that consumers had to watch out for frauds who wanted to steal their money by trying to scam them by letter or phone. Nowadays, consumers must be even more vigilant, what with the ever evolving digital world of mobile banking and other money related online transactions.

A recent ABC News article details how cybercriminals are using commonly used programs and websites like Facebook to steal money from consumers.

Some victims of cybercrime in Illinois have considered filing for bankruptcy in Chicago. These con games and bogus schemes strip people of their security -- and money -- sending them spiraling into a financial mess.

Even if a person is a victim of cybercrime, it can take a long time for him or her to recover. An experienced bankruptcy lawyer in Chicago can work with troubled consumers to ensure they evaluate all options before filing for bankruptcy.

Cybercriminals are becoming increasingly inventive on how to steal from consumers. While that may seem like a compliment to those committing illegal acts, it is a word of warning for everyone to do a better job of securing their funds.

The ABC News article states that hackers are using text messages and emails to obtain a person's phone number. They then plot a scheme whereby they assess and attempt to collect small fees from those stolen phone numbers, which can go unnoticed by the phone's owner.

Gone are the days when a thief would need a person's credit card number or identification to steal from them. They can now use malware and viruses to steal right from underneath a user's nose.

For those who use online sites to store credit cards, hackers can access that information, cost users and the websites big bucks if they pluck a few at a time. Consumers may not notice or they may be complacent enough not to go through customer service to fix it if the loss is small.

Hackers will use video or web links with outrageous headlines to try to get people to click, which can then lead them to the information they need to begin the hacking process. Android users, whose marketplace is more open than Apple users, may be at a heightened risk of hacking because people can create realistic-looking applications that are actually viruses.

To stay safe, follow these tips:

• Check to see what authorizations you are giving to a website, Facebook program or other online process.


• Don't bank online except through secure, official sites.


• Check phone bills regularly.


• Don't download applications from unknown sources.

The bottom line is this can be a major source of income for thieves. Corporations and consumers lose tens of millions of dollars per year on cybercrime, so it is critical to take proper steps to shield yourself against it.

Being a victim of cybercrime can send your finances into ruin. You may want to consider bankruptcy in Chicago to eliminate debts and get you back on your feet. Bankruptcy helps many people, but it isn't right for everyone. Consult with an experienced bankruptcy attorney to see if it may be the solution for you.

Continue reading "Cybercrime Can Lead Consumers into Chicago Bankruptcy" »

You may recall the "good 'ole days" when you could buy fruits and vegetables from a local farmer for pennies on the dollar, or getting a good deal from your local grocer during your weekly shopping excursion. Unfortunately, those days are over as food prices overall continue to soar.

Nowadays, consider yourself lucky if you're paying less than $100 a week for food, and if you have a large family, it's probably closer to $200. These bills, along with medical bills, credit card bills, increasing bank fees and other payments have caused many people to consider bankruptcy in Chicago.

Add in high unemployment, a stumbling economy and the high cost of fuel, and it may be time to talk with an experienced Chicago bankruptcy lawyer. While bankruptcy isn't for everyone, it may be right for you.

Bankrate.com offers these tips on how to cut back on your food shopping bill.

Look at the packaging: Companies have been trying to fool consumers for a long time by selling the same product but in smaller boxes. Take a look at cereal boxes, for instance. They used to be huge. Now, they're a lot smaller, some down to eight ounces, which isn't much when you're trying to feed a family. And of course prices haven't shrunk as the size of the boxes have. One thing you can do is check the "price per unit" label. That's the true value of the product so you can determine whether you're getting a good deal or you're getting scammed. You can also save considerable dollars in some cases by buying a different brand.

Where's the beef?: The price of beef and pork has increased dramatically in the last year -- 11.5 and 7.3 percent, respectively. The cost of fish -- largely based on natural disasters in Japan, a fishing-heavy country -- has also spiked. Consider spending less on these items and more on chicken or turkey, both of which have remained less expensive over the past year. Wait until beef and pork prices dip.

Stay in for dinner: Restaurants typically charge a lot while not providing a whole lot of bang for the buck. While eliminating eating out may not work for your family, consider how much you're spending. Look for coupon apps if you have a smartphone, and research websites that offer half-off or more on dining certificates. Also consider drinking glasses of water or sharing meals with your family or guests.

Only eat in-season fruits and veggies: Grocery stores pay high dollar for out-of-season fruits and vegetables, and guess what -- they pass the cost on to you. If you're jonesing for strawberries in December, try to hold off until summer when the cost drops.

Be frugal: Be a coupon clipper and don't be embarrassed. Also, look for weekly deals, shop around when practical, and buy generic instead of name-brand products. Smart shoppers are finding savings every day.

Continue reading "Grocery Bills, Other Bills Add Up, Leading Some to Consider Chicago Bankruptcy" »

The banks keep making it more and more difficult for many people in Chicago who are simply trying to get by.

First, the banking industry's sub-prime mortgage debacle is largely to blame for the biggest financial decline in the last 100 years. Now, they have decided that the way for them to recover all that lost money is to fine their customers for doing business with them.

While it makes little sense on the surface, it may work unless consumers fight back by doing business with other banks or, better yet, credit unions. And although bank fees increasing this year may not cause someone to file for bankruptcy in Chicago, it is another signal of the difficult times consumers are experiencing.

While bankruptcy may not be appropriate for every consumer, Chicago bankruptcy lawyers have helped many people who are scrambling to find answers to their troubling financial situation.

CNN Money reports that Citi is the latest large bank to announce it is taking its customers for granted by hiking fees on checking accounts and banking accounts. According to CNN, the bank will charge its mid-level Citibank Account members $20 a month -- $240 per year -- if their minimum balance drops below $15,000 in their combined accounts. The previous threshold was $6,000.

For EZ Checking customers, the $15 per month fee will be imposed if they don't have $6,000 in their account. That's because Citi is trying to phase out EZ Checking, which has no current monthly fee, and move people into Citibank Account or Basic Banking account features. Of course both of those options have fees already in place.

Its Basic Banking account fee went from $8 to $10 per month, unless customers have at least $1,500 in their account or make one direct deposit and one automatic online payment through their checking account each month. The trade-off is that current account holders have to make five online transactions monthly but are not required to have a minimum balance.

Citi's announcement comes as other banks have announced recent hikes in fees. Bank of America, Wells Fargo, JPMorgan Chase, Sun Trust and Regions have all added fees in recent weeks. Some have begun charging for debit card transactions as well.

With legislation that cut back how much banks are allowed to charge on a per-swipe basis at the point of sale, they have looked to make up the money elsewhere -- with consumers being the target.

It's sad that banks have chosen to treat their customers that way, but it's nothing new. They may be taking pointers from credit card companies that impose significant fees and outrageous interest rates in order to make money.

Add that to the climbing cost of living in America and it's no wonder bankruptcy in Chicago is an option many are considering. Consider a free consultation to see if it's a fit for you.

Continue reading "Bank Fees Taking a Toll on Chicago Consumers Considering Bankruptcy" »

A savings account may be a luxury for many people trying to save money for their future, but for many Chicago families, saving money isn't as feasible as it once was.

With the economy struggling to recover and people dealing with job loss, high-interest loans and credit cards that have kept them buried in debt, filing for Chapter 7 bankruptcy in Chicago may be a sound option.

Filing for bankruptcy immediately stops creditors from calling and attempting to garnish wages and otherwise making life difficult. So, if a consumer is drowning in debt brought on by job loss, mounting medical bills, or predatory lending practices, consulting with an experienced Chicago Bankruptcy Attorney would be a smart move.

According to a recent survey, more parents are saving for their children's college education, but the rising costs of higher education, coupled with additional pressure from the poor economy, are hurting the future value of those savings.

The survey, conducted by Fidelity Investments, found that 67 percent of parents have started putting money away for tuition costs. That's a 9 percent jump from a 2007 survey, the first year the survey was done.

But more than half of parents who were surveyed are still paying off their own student loans and half are also paying an average of $576 per month for preschool or daycare. About 40 percent are paying for those obligations along with a college fund for their kids, too. That has increased 27 percent from five years ago.

Because of increasing college costs and people less able to save money, Fidelity believes the average American family will be able to pay for about 16 percent of college costs, based on savings. In the last five years, that number has dropped about 8 percent, while college costs have jumped nearly 26 percent.

The percentage of parents who believe it is their responsibility to pay for their kids' college has increased, and many are taking extra jobs to pay for the added expense. Some parents are asking their teens to take part-time jobs, live at home and commute, and consider public universities over private schools.

What this study shows is how the economy has affected the average household. Savings are a great thing to have, but many people are forced to decide between putting away money for junior's college fund or paying off the expensive purchase that now costs twice what the sticker price was because of high interest rates levied by credit card companies.

Saving money can sometimes take a back seat when bills are mounting and a family is getting behind making payments. Family members must make difficult choices, and for those who are absolutely devastated by debt, saving money is just not going to happen. For those people, bankruptcy could work.

Filing for bankruptcy halts all debt collection practices, including foreclosure, wage garnishment and collectors calling. It allows for consumers who have overwhelming debt to get a fresh start with their finances after the IOUs disappear.

Continue reading "College Savings Takes a Hit in Weakening Chicago Economy" »

Nine neighborhoods struggling with foreclosed homes throughout Chicago will get an infusion of money under a $20 million loan pool proposed by Mayor Rahm Emanuel.

This new program may help some homeowners who have fallen behind on monthly mortgage payments, but it won't stop foreclosures altogether. Filing for bankruptcy in Chicago, will, however. An experienced Chicago Bankruptcy Lawyer will tell you that once you file for bankruptcy, all debtors you owe are banned from collecting or contacting you. Even if your home is scheduled to be auction, the process stops while bankruptcy starts.

This set of laws is designed with the consumer in mind and allows for a fresh start if debts are piling up. After passing a means test for Chapter 7 bankruptcy and showing the debt vs. any income or assets a person may have, most people can have their debts completely discharged. It allows for people to enjoy a freedom they may have forgotten after battling creditors for years and dealing with wage garnishments and high interest rates.

Under the mayor's plan, according to the Chicago Sun-Times, the money will be used to attack "small sub-sections" of nine neighborhoods that have been most affected by the economic downturn:

• Humboldt Park


• Chatham


• Chicago Lawn


• West Woodlawn


• Auburn-Gresham


• West Pullman


• Belmont-Cragin


• Englewood


• Grand Boulevard

The goal of the program is to turn 2,500 houses that are sitting in foreclosure and unoccupied into owned homes over the next several years with the help of $20 million in loans through the John T. and Catherine D. MacArthur Foundation.

By using that money, the mayor expects to leverage private money -- mostly from area banks -- to up the total amount to around $50 million. The money will be used either to help underwater homeowners -- those who owe more on their mortgage than their house is worth -- provide incentive packages for potential buyers and renovate existing foreclosed homes that have become worn down.

The newspaper reports that in 2010, 10,500 homes went through the process of foreclosure in Chicago, an increase of 20 percent from 2009. About 95 percent of those houses are now vacant.

Because of the Great Recession, which killed jobs, tightened credit and affected every American, foreclosure has become rampant in many parts of the country.

Home values have been slashed -- sometimes by 2/3 of what the owner paid -- and people have had to walk away from houses because they are jobless and can no longer afford to make monthly payments.

But filing for bankruptcy stops foreclosure in its tracks. Whether one payment has been missed or a dozen, bankruptcy stops the process and allows people to stay in their homes while it is going on. A Chicago Bankruptcy Lawyer and bankruptcy officials work to determine if the person qualifies and then your attorney works to help you get rid of the years of debt that has been making life difficult.

Continue reading "Chicago Foreclosures Get Cash Boost Under Mayor's Plan" »

One of Chicago's post popular websites for food enthusiasts in Chicago is now on sale for at least $40,000 after one of its founders filed for Chapter 7 bankruptcy protection in Chicago.

The Chicago Tribute reports about recent developments in the beloved website LTHForum.com, a message board with hundreds of thousands of posts from reviewers, tourists and residents of Chicagoland who bring their opinions about the cities many dining options.

As is common with Chapter 7 bankruptcy filings, those in debt are able to sell off assets to pay creditors and become free from debt. Chicago Bankruptcy Attorneys are well-versed in these matters and are available to discuss the options 24 hours a day.

In the case of LTH Forum, it's bizarre that a website with no advertising and membership fees and free from fancy graphics has commanded an opening bid of $40,000. But, when it comes to online properties, traffic and popularity are king. The founder filed for bankruptcy in 2010 after debt began piling up.

In 2007, the founder borrowed money from another LTH member, yet never repaid. He was sued in 2009 and filed for bankruptcy protection in 2010. LTH Forum was listed as one of his assets and therefore is being put up for sale. The first bid was made by three other members who said they want to keep the site going as is.

In 2010, 64,168 people filed for bankruptcy in U.S. Bankruptcy Court for the Northern District of Illinois, which includes Chicago, according to the American Bankruptcy Institute. That's up more than 200 percent from 2006, when 20,052 people filed.

It is common in Chapter 7 filings that assets will be sold so that the person with the debt can pay it back. It's the most common form of personal bankruptcy and can help people who don't have many assets, but who continue to deal with credit card, medical bill and other forms of debt over the years.

It's possible that a person's debts can be paid off in just a few months, depending on the case. According to the Bankruptcy Code, a Chapter 7 case starts with a petition, a list of assets and expenditures and income in the bankruptcy court nearest to you. A trustee is appointed to start the process of figuring out what assets are available to be sold and determining how to pay off creditors.

While this sounds like a complex process, it is more common that a petitioner has few assets worth selling -- in many cases it's even possible to keep your house and car. Even if you're not sure, use our free personal debt analysis to help determine if this is the right avenue for you, your family and your finances.

Continue reading "LTH Forum For Sale As Website Founder Goes Through Chapter 7 Bankruptcy 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" »

The results of a study conducted through the University of Illinois found that those who filed for bankruptcy protection have largely seized their chance at financial redemption and are changing their financial lives for the better, according to an article on Mother Nature Network.

Our bankruptcy lawyers in Joliet, Chicago and elsewhere in Illinois see the change in our clients, from their first office call or visit to the resolution of their case. Debt can create an enormous amount of stress in a household, particularly those under the relentless barrage of collection agencies.

Chapter 13 or Chapter 7 bankruptcy protection in Chicago affords families the opportunity to regain their financial freedom and independence and to begin enjoying life again. The study found mandatory counseling required by bankruptcy reform in 2005 is having a positive impact.

Reforms in 2005 require pre and post bankruptcy counseling. As we have reported, the measures were largely a handout to banks, which were complaining about the consequences of their own irresponsible lending practices. An income-to-debt test meant to require some to enter repayment plans was the other big change. However, as we reported on our Chicago Bankruptcy Lawyer Blog, consumers struggling with mortgage debt, credit card debt and medical bills continue to file bankruptcy in record numbers.

"That''s not to say people aren't facing problems post-bankruptcy," said Angela Lyons, an economist and the study's leader. "But, they wanted to start implementing good (financial) behaviors, and they have started doing that."

Changes consumers were able to make following bankruptcy included:

-Setting short- and long-term financial goals.

-Saving money each month.

-Better tracking of expenses and income.

-Less impulse spending.

-Paying bills on time.

-Keeping their debt-to-income ratio below 20 percent.

Continue reading "Study Confirms Illinois Bankruptcies Give Consumers a New Beginning" »

CNN is reporting that six percent fewer consumer bankruptcy filings were reported in the first quarter of 2011. At first blush, that sounds like good news.

The truth of the matter is that bankruptcy filings are at historically high levels. Chicago bankruptcy attorneys continue to handle record numbers of filings for consumers who are dealing with bad real estate debt, overwhelming credit card debt or astronomical medical bills.

Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 in an effort to reduce the number of bankruptcy filings. Despite the name, this legislation was largely a handout to credit card companies, banks, the medical industry and other big campaign donors. The largest change was the requirement that some with certain income-to-debt levels establish a repayment plan.

To illustrate the impact the economy has had on filings, there were 1.1 million bankruptcies nationwide in 2006 -- last year nearly 1.6 million people filed for bankruptcy protection.

Through March, a total of 340,012 filings were reported, which includes Chapter 7 bankruptcy filings, Chapter 13 filings and filings by farms and corporations.

The stigma once associated with bankruptcy has diminished as consumers seek protection in record numbers. The reality is that bankruptcy can provide tremendous relief and permit a family or filer a new lease on life. Collection calls will stop immediately upon filing. And if they don't, you may have standing to take legal action against them.

Congress is moving to end the government's failed mortgage modification program, once again leaving Chicago homeowners facing foreclosure to fend for themselves.

Our Chicago bankruptcy attorneys continue to assist clients struggling with mortgage debt to determine the best course of action. The Home Affordable Modification Program was an abysmal failure largely because banks refused to cooperate -- ultimately only about $1 billion of the $50 billion earmarked for homeowners was distributed.

In many cases, the process turned out to be a nightmare for homeowners who were already struggling to stay afloat financially. Mortgage modifications were approved on a temporary basis, then later rejected for permanent modification. Often, the banks used the resulting mortgage arrears to file foreclosure actions. In other cases, lenders approved a modification and then sold the loan to a bank that would not honor the agreement.

In all cases, consulting a Chicago law firm experienced in handling foreclosures and bankruptcies is the best course of action to protect your rights and the future financial well-being of you and your family.

The New York Times reports House Republicans have voted to kill the program. Democrats may try to save it, but even they admit it has been a failure. Banks have done everything possible to avoid helping homeowners, including losing paperwork and denying many who were eligible according to the guidelines. A review of the program by the government determined banks could only be punished for handing out too much help -- which has been anything but the problem.

Meanwhile, housing prices have fallen for six consecutive months -- very near the technical definition of a double dip recession. Many outlets are reporting the next shoe to fall will be deficiency judgments. Homeowners who avoided bankruptcy via strategic default, foreclosure or shortsale, could be on the hook to the bank for as long as 10 years and may be chased for the difference between what was owed on the mortgage and what the property brought at foreclosure sale.

In other words, they may have gone through the pain and stress only to face bankruptcy anyway -- instead of tackling it all at once and putting their financial issues behind them through a Chapter 7 bankruptcy filing.

RealtyTrac reports there were 225,000 foreclosure filings in February, a number that could outpace even the height of the recession. Until the market regains stability, home prices will continue to fall, and the number of struggling homeowners seeking a new beginning through bankruptcy protection in Illinois will continue to climb.

Continue reading "Chicago Bankruptcy Lawyers note Government Moves to End Failed Foreclosure Assistance Program" »

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" »