Chicago Bankruptcy Lawyer Blog

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" »

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" »

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 " »

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?" »

I've got good and bad news. First, the bad - credit card companies are raising minimum payments. Now, for the good - credit card companies are raising minimum payments.

No, I haven't gone crazy. You see, higher minimum payments are actually a blessing in disguise. Yes, they might be more difficult to manage if you're accustomed to paying less. But in the long run, being forced to cough up more cash can actually save you money.

Here's how. For the last several years, credit card companies commonly set minimum payments at just 2-3%. For most folks, that rate barely covers the interest levied on their balance. And if most of your payment is going to interest, you're not doing much to reduce the principal - the original payment you made for your purchases. Credit card companies have you right where they want you. The minimum is small enough that you're unlikely to default - and you're given the (false) impression you're not paying that much. On the other hand, they can guarantee you'll be paying them for decades.

Continue reading "Chicago Bankruptcy Lawyers Caution Against Paying Minimum Balance" »

While once upon a time a bankruptcy filing might have meant embarrassment and shame, now it means something else - a fresh start. Those who file for bankruptcy today are intelligent, responsible - heck, they're even famous.

In case you need more proof that the stigma is finally fading, here it is - even the Chicago Cubs are considering filing bankruptcy. The Cubs still pack every game. Wrigley field is an American icon. If one of the oldest and most well-known baseball teams in history can file for bankruptcy, why can't you?

In the case of the Cubs, it's not about insolvency, according to the above video featuring DebtStoppers attorney Patrick Semrad. The team isn't broke - instead, the bankruptcy is a shrewd business move that will allow a buyer to take on the franchise with no liabilities - no chance for creditors to come back and take legal action to recoup debts.

As an individual, you can't file for Chapter 11 like the Cubs - that's a business bankruptcy. But, just like the team, you can gain the same benefit of legal protection.

Continue reading "Take a Bankruptcy Cue From the Chicago Cubs" »

The foreclosure saga continues. This week, the Washington Post reported that unemployment has officially overtaken subprime mortgages as the leading cause of foreclosure. An estimated 1.8 million homeowners could lose their house to the bank this year, compared to last year's 1.4 million.

Folks without jobs have an extra hard time qualifying for loan modification (so much for the federal government's modification program). As if that's not bad enough, lenders like to tack on late fees for delinquent borrowers - so that when they do find work again, they have to pay a lot more than just their missed mortgages.

But that's enough negativity for one post. How about some good news? Here it goes - even if you're dealing with unemployment, you still don't have to give up your house!

What's the catch? You need to act fast.

Continue reading "Bankruptcy Can Protect the Unemployed From Foreclosure, Advise Chicago Attorneys" »

In our last post, we debunked a common myth about bankruptcy: some folks misguidedly believe filing will cause them to lose their belongings, including their house. But bankruptcy can not only eliminate your debt, it can actually help you save your home, car and other possessions. Want to see for your own eyes? Take a look at your state's exemptions. In addition to federal exemptions, each state has its own list of items that are protected from repossession.

In Illinois, for instance, you can exempt up to $7,500 of your home's equity or up to $1,200 of the equity in your vehicle. In Georgia, it's $5,000 for the house, $1,000 for the car. If you're married, you're in luck - those amounts double.

Continue reading "Illinois and Georgia Bankruptcy Exemptions Part 2" »

One of the biggest misconceptions people have about bankruptcy is that they'll have to give up all of their stuff when they file. A woman in my neighborhood was so terrified that her house would be taken away if she went bankrupt that she (unfortunately) didn't even consider filing as an option. She just let the bills pile up, hoping for a miracle, until - lo and behold - the bank foreclosed on her family's home. Had she tried bankruptcy - the option she feared the most - she'd probably still be living down the block.

Despite sometimes misguided public opinion, of the most appealing features of bankruptcy is its ability to protect assets from creditors, thanks to a long list of exemptions. It's why at DebtStoppers we often tout Chapter 13 as the surest way to stop foreclosure.

Continue reading "Illinois Bankruptcy Exemptions Can Protect Your Assets" »