Chicago Bankruptcy Lawyer Blog

Homeowners shouldn't be surprised if they find a foreclosure notice in the mail after defaulting on their mortgage payments. But what if the bank began foreclosure proceedings for a loan you knew was already paid off?

More and more frequently, Chicago bankruptcy lawyers are seeing ghost mortgages coming back to haunt borrowers.

In a recent Reuters article, a Kansas couple refinanced their home to take advantage of lower rates. But while Wells Fargo said the original loan would be paid off in the refinance, it was never recorded in the paperwork.

As a result, the family was thrown into foreclosure - despite the fact that they had never made a late payment.

Experts attribute the problem to sloppy paperwork during the housing boom, when lenders attempted to sell as many loans as possible so they could resell to millions of investors. Now banks are using the same sloppy tactics to foreclose on as many homes as possible with reckless speed.

Some of the borrowers being pushed into foreclosure were never in default; others never even had a mortgage. Often times, a computerized banking error is the source of the mix-up.

It's a good reminder of why it's so important to keep tabs on the state of your credit. Banks report any late or missing payments - whether valid or not - to credit bureaus, who in turn record the discrepancies in your credit report. Having a credit score tarnished by a delinquent mortgage or a foreclosure you didn't know about can keep you from getting future loans or lower interest rates.

Of course, the majority of folks facing foreclosure are still those who have missed one or more payments, usually because of job loss or overwhelming credit card debt.

Regardless of how you've gotten into a mess with the bank, filing for bankruptcy in Chicago is often the best way out.

Chapter 13 bankruptcy has the power to stop foreclosure proceedings from the moment you file, so you can protect your house and stop the bleeding on your credit report.

Whether you're unfairly caught up in a foreclosure or are losing your house because you couldn't afford to make payments, the effects can ruin credit, put you at risk for costly lawsuits, and, of course, threaten to snatch the roof from over your head.

Bankruptcy can put a fast stop to foreclosure, so you can start rebuilding your finances, you credit, and your life.

Continue reading "Chicago Bankruptcy May Help Homeowners Haunted by Old Mortgages" »

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" »

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" »

Remember last decade's adjustable-rate mortgages? You know, the subprime loans that led to millions of mortgage defaults across the country - and pretty much launched the whole recession? Well, they're back.

But this time around, lenders say they're different - and depending on your financial situation, they may be able to help you afford a home. In the past, ARMs came with risky gimmicks, like rates that adjusted every six months (seriously, how can you keep up with that?) and an option that allowed people to put off paying interest - leading to a huge bill later down the line.

Today's ARMs are far more conservative, explain Chicago bankruptcy attorneys.

Continue reading "Should Chicago Homebuyers Opt For New Adjustable Rate Mortgages?" »

As if it isn't bad enough that most folks are paying upwards of 20% in credit card interest, now Chicago consumers are paying a premium to use cash, too. But it doesn't have to be that way, say Chicago bankruptcy attorneys.

It's no news that withdrawing money from another bank's ATM will result in a fee - both from your bank and the competitor whose machine you're using. Usually those fees have ranged between $2.50 and $3. But Chase recently announced it's trying out $5 ATM fees for non-customers in Illinois. If you're taking out just 20 bucks, that's the equivalent of 25% interest - even more, when you factor in the penalty your own bank will levy.

If customers are willing to pay these outrageous rates, other banks will likely follow suit. Have Americans really become so reliant on convenience that we're willing to fork over a quarter of our income just for the ease of using the nearest ATM?

Continue reading "ATM Fees Add to Chicago Consumers' Debt Woes" »

You might have fought hard to afford your mortgage payments - but most homeowners assume the battle is over when the foreclosure notice comes in the mail.

Not true, say Chicago bankruptcy attorneys. Sure, being this close to losing your house is not a good position to be in. But you do have one more shot to fix your financial situation and keep your home. Bankruptcy has the power to stop foreclosure while you and the court work out a payment plan with lenders. Many folks aren't aware that bankruptcy is an option - or they mistakenly worry it will wreck their credit. In reality, it can do just the opposite, according to MSNBC.com.

Continue reading "Chicago Homeowners Can Stop Foreclosure With Bankruptcy" »

It used to be that kids wanted a cash allowance - today, they want a credit card of their own.

Credit card companies like Visa and MasterCard are increasingly marketing prepaid debit cards to teens and preteens. And they're convincing parents to buy the cards for their kids by pitching them as an easy way to teach children about finance. But these junior credit cards may be doing more harm than good, say Chicago bankruptcy attorneys.

Because prepaid debt cards can be loaded with a set amount of money, they show kids how to control their spending - at least, that's what credit card companies are trying to convince parents. In reality, the cards come with all kinds of fees - activation fees, maintenance fees, reloading fees, etc - that can leave kids with early debt and Mom and Dad footing the bill.

Continue reading "Credit Card Companies Targeting Kids With Prepaid Debit Cards" »

Would you be OK with paying a 60% premium on your purchases? If you're like most Americans, the answer might be yes.

Consumers are signing up in droves for high-interest credit cards like First Premier's 59.9% APR card. In fact, the same card had plenty of takers when it debuted with a whopping 79.9% APR (the company only lowered the rate this year because so many borrowers were defaulting). So why are so many folks clamoring for a chance to be charged outrageous interest? Simple, say Chicago bankruptcy attorneys. They think it's the only card they can qualify for.

Continue reading "Chicago Consumers Sign Up For Credit Cards With Outrageous Rates" »

Kmart's latest blue light special might not be on clothing or toys, but on financial services.

With millions of Americans looking for checking account alternatives to avoid rising bank fees, retailers like Kmart, Wal-Mart and Best Buy are jumping on the banking bandwagon, according to The Washington Post. Kmart, for instance, is testing out prepaid cards, cash transfers and even cash checking services in its Illinois stores in hopes of luring customers who are either fed up with big banks or who never had a bank account in the first place. But as with any product, consumers are finding there are pros and cons.

Continue reading "Chicago Shoppers Turning To Big Box Stores For Financial Services" »

Two foreclosures in Massachusetts could have a big impact on banks - and homeowners - nationwide, say Chicago bankruptcy attorneys.

Last week a Massachusetts court voided the foreclosure of two homes, citing the fact that Wells Fargo and U.S. Bancorp could not prove they held the mortgages at the time they seized the residences. Last year, two other banking giants, Bank of America and JP Morgan Chase & Co., briefly stopped foreclosures because of similar documentation problems. If lawmakers get their way, banks are going to have to be a lot more careful about foreclosing on properties - and consumers may get better protection.

But homeowners facing foreclosure shouldn't breathe a sigh of relief just yet.

Continue reading "How Foreclosure Ruling Could Affect Chicago Homeowners" »

It looks like even mortgage companies are feeling the holiday spirit this time of year.

Freddie Mac recently announced plans to stop foreclosures from Dec. 20 to Jan. 3 - long enough for folks to stay in their homes during the Christmas season. Fannie Mae has pledged to halt evictions as well. With millions of Americans behind on mortgage payments this time of year, it's a nice gesture. Unfortunately, point out Chicago bankruptcy attorneys, it's also only putting off the inevitable.

Continue reading "Mortgage Companies Temporarily Suspend Chicago Foreclosures" »

By now you've probably already heard that the Fed plans to plunge $600 billion into U.S. banks. But what does that mean for the average American?

That depends on where you're at financially, say Chicago bankruptcy attorneys. By printing more money, the Fed hopes to lower already-low interest rates. And as we all know, low interest rates are good for borrowers, like those of us taking out a home loan, but bad for savers - like the millions of Americans saving up to pay off debt or weather a rough economy.

Continue reading "Low Interest Rates Might Help Chicago Homebuyers, But Could Hurt Others" »

It's still a shot in the dark, but there's a possibility that some foreclosed homes could be returned to their owners, according to Chicago bankruptcy attorneys.

Officials in every state across the U.S. - including Washington D.C. - are investigating improperly handled documents and illegal activities that may have allowed lenders to foreclose on thousands of homeowners who should not have lost their properties, according to the AP Press - things like signing documentation without a required witness, having signatures given by employees who didn't know anything about the material in the documents or - even worse - by people who hadn't even read the papers.

Continue reading "State Officials Across the U.S. Investigate Legality of Foreclosures" »

It seems like every time I check my bank's interest rate, it's getting lower. But while today's record low rates are bad for growing my savings, they can be good for paying down debt - a saving method in itself.

Eventually - and probably sooner rather than later - rates are going to start going up again. Who wants to lock up money in a 5-year CD at 1.5% when rates could be double that in just a couple years, right? Fortunately, as Chicago bankruptcy attorneys point out, compounding can work in reverse, too.

Continue reading "How Paying Down Debt When Rates Are Low Can Save Money" »

Banks are finally starting to see the light about the mortgage crisis. But is it too late?

Banks are starting to improve programs aimed at helping homeowners avoid foreclosure, according to Newsweek. Amid news that half the participants in President Obama's Making Home Affordable Program have dropped out because it wasn't working, banks' timing couldn't be better. The only problem is that, with up to 5 million people in danger of losing their homes - and millions more already foreclosed upon - the new effort might not be enough. Fortunately, there's an alternative.

Continue reading "Banks Finally Start Helping Chicago Borrowers with Mortgages" »