Chicago Bankruptcy Lawyer Blog

The good news is that Chicago foreclosure activity was at its lowest level in three years in 2011. The bad news is it's headed back upward.

A rising number of local homes were repossessed by lenders or sent to court-appointed auctions in the fourth quarter of last year, according to the Chicago Tribune. An estimated 11 percent more houses were repossessed in the last quarter of 2011, and 62 percent more properties were auctioned off.

Many experts predicted this temporary slowdown in foreclosure activity - not because folks were better able to afford their house payments, but because big banks put a halt on many foreclosures to investigate their flawed procedures. Now it looks like they're back in business.

But a foreclosure notice doesn't have to be a death sentence for home ownership. Chicago bankruptcy has the power to legally stop the foreclosure process, no matter how behind you are on your payments.

As of the fourth quarter, resolving a foreclosure case in Illinois took an average of 567 days. Now, many factors are involved that cause each particular case to differ - and there's no guaranteeing how fast the bank will foreclose on your home. But even if you are several months behind on your mortgage, there is time to take action if you're still in your house.

Since being delinquent on your mortgage payments - as with any bills - can seriously damage your credit score, it's always better to deal with your situation sooner rather than later. That said, Chicago bankruptcy lawyers have seen a bankruptcy filing stop foreclosure hours before a home sold at auction.

As foreclosure becomes an everyday threat for more people, the power of the automatic stay has become indispensable. An automatic stay is a court-ordered protection mechanism that goes into effect the moment a homeowner files for Chapter 13 bankruptcy. It then stays in effect throughout the 3-5 year repayment process.

After you have paid off the required amount of unsecured debts, the remainder of your debt burden will be forgiven.

Being underwater in your mortgage is not ideal, but it's not enough to threaten your home ownership. More often than not it's the other burdens - the credit card debt, the medical bills, the car payments - that make house payments so troublesome. Bankruptcy can relieve these burdens, making it possible to stay in your home.

Many folks mistakenly believe they can get away without making payments because they didn't receive a foreclosure notice right away. However, just because banks are slow to file paperwork doesn't mean they're going to give you a free ride. When you stop making payments, you're starting the foreclosure process rather you know it or not.
When you do nothing to stop foreclosure, you risk losing more than your house - you risk losing your freedom. Foreclosure hurts credit and leaves homeowners without a roof over their head.

By filing for bankruptcy in Chicago, you can avoid not only losing your home, but having to search for a new place to live. You will also have the chance to start building equity and repairing your credit.

In short, bankruptcy provides the breathing room you need to get back in control of those house payments - and get back on your feet financially.

Continue reading "After Decreasing Last Year, Chicago Foreclosure Activity Is Back on the Rise" »

Most Americans admit to being worried about the credit card debt crisis. But when it comes to admitting a personal debt problem, few seem willing to fess up.

Nine out of 10 people polled in a Bankrate.com survey said that debt was not a source of friction in their lives. Yet statistics show that the average U.S. consumer owed approximately $4,200 in 2011. Something isn't adding up.

Time and time again, Chicago bankruptcy attorneys have seen clients fall deeper into debt because they are in denial that they need help. Had they taken action earlier - by filing for Chicago bankruptcy, for instance - they may have been able to stop foreclosure or make eliminating debt much simpler.

Many times it's easy to accept that a friend or neighbor is in debt - but hard to come to terms with the fact that you have a problem. There's also the shame factor. Many folks are too embarrassed to admit that their finances are in sorry shape. But it's important to realize that if you're in debt, you're not alone.

Years of dismal employment rates, dropping real estate prices, and stagnant wages make paying the bills difficult for everyone. Debt may not be entirely your fault. But until you admit you have too much debt, it will be impossible to help alleviate it.

A recent Bankrate.com article looks at the best ways to tell whether you have an issue with debt.

Your Spending Is Out of Line with Income
Is your take-home pay falling while your credit card balance is rising? Whether it's because of reduced hours, a layoff, or rising consumer prices, this is a pattern that can be very hard to correct once it starts. The larger a credit balance gets, the faster it continues to grow. Sure, it's easy to hold out hope for that raise or new position - but there's no guarantee that it will come through. And if it does, your debt may be beyond help at that point. When you can't stop spending more than you're earning, it's time to seek help.

You Never Pay More than the Minimum
When money is tight, it's tempting to make the smallest payment possible. But doing so will cost you a lot in the long run. If you're paying only $25 on a $500 bill, that means you're paying interest on $475 a month - plus the thousands of dollars you may already owe. The problem is that once you make a couple minimum payments, your balance can rise so rapidly that you can't afford to make anything BUT the minimum in the future.

You're Close to Your Credit Limit
Much of your credit score is derived from how much debt you are carrying. Carrying 30% or less of your available limit is ideal. If you are routinely approaching - or surpassing - your limit, it's a sign you have more debt than you can handle. Continuing to do so will only damage your credit score and rack up fees.

You Don't Know Your Balance
Are you in the habit of leaving bills unopened until the due date, or making out a check for the minimum payment without looking at the balance? This is a classic sign of debt denial. Removing yourself from the situation might make you feel better for the time being, but it won't do anything to help your debt. If anything, ignoring the situation only makes things worse.

You're Juggling Bills
Have you ever opened a new line of credit in order to transfer your balance? You may get a lower rate initially, but ultimately you are just shifting debt around. If you find yourself juggling multiple lines of credit, it's a sign that you need to actually lower debt - not just bounce it between cards.

You're Hiding the Evidence
We all deserve a little spending indulgence now and then, and hiding the occasional reasonable purchase from a spouse or family member is somewhat normal. But when it becomes routine, watch out. If you're keeping secrets, it's a sign that something isn't right.

Continue reading "Many Chicago Consumers Living in Denial about Out of Control Credit Card Debt" »

The Occupy movement started strong and faded quickly after police and city officials began taking a stance against protesters and seeking to remove them.

But at the core of the message, the young people who slept in parks, chanted sayings, held signs and sought change wanted a better shot at success. They wanted to live the American dream. This movement didn't come when the country was at its most prosperous, it came years after the Great Recession when unemployment is high, the real estate market is dying and the country is mired in debt.

It's about finances.

Many young people have come out of college with tens of thousands of dollars in debt and they have few job prospects. They can't find work, living expenses are high and life is tough. But bankruptcy in Chicago can help.

Chicago bankruptcy lawyers have been able to help numerous clients who are looking for answers. For many, bills are mounting, income is low and there seems to be few options. Bankruptcy may be a way out.

By filing for bankruptcy, the creditors who have been hounding the consumer are held at bay. They are banned from contacting the filer. Second, once the process goes through, the debt disappears. In some cases, assets may be sold to pay for some of the debt, but not always and there are exemptions.

For young people starting their life off in debt, this may be a helpful tool to get them on track. Credit card debt and other loans can lead to late fees and high interest rates that can cause frustration and prevent them from being successful.

Kiplinger recently wrote a column providing some financial advice to young people who are looking for answers:

Reality check: Rather than naively travel to New York City or Hollywood to seek fame and fortune, do some research. The article suggests that looking at cities that have solid job prospects and a low cost of living is smarter than traveling to a big city hoping to hit it just right. The odds are stacked against the millions of people who think that the big city means big jobs.

Student loan help: There are options to help cut down on student loans, including setting up gradual payments or income-based repayment options on federal loans. There are proposals in Washington to try to expand the options available to students.

Out-of-state tuition is very expensive and while some states provide loopholes to get around that extra cost, it can still be pricey. Some students may be able to avoid major debt by taking their second choice and choosing the in-state option. Choosing public or private or community college for core classes may be smarter and fit the family budget.

Health insurance: With universal health care in the pipeline, most young people should be able to get even basic health care. Some cities and states have high health insurance premiums, while others are more affordable.

The column suggests that most young people should be able to afford basic health insurance for less than $100 per month. Young people with high risks or pre-existing conditions can stay on their parents' insurance until they're 26.

Continue reading "Young Chicago Adults Needing Financial Advice May Consider Bankruptcy in 2012" »

For the countless Chicago families struggling with money, 2012 represents the chance for a fresh start.

There's no doubt that the past few years have been a rough ride. Unemployment in the Chicago area hovered around 10%, while incomes of those fortunate enough to have jobs rose less than 1%, the Chicago Tribune reports. Many folks are stuck with underwater mortgages - i.e., they're making monthly payments greater than the current value of their home. Or, worse, they're already caught up in a lengthy and draining foreclosure process.

When money is tight, it can be easy to feel like you're at the mercy of the economy. But the choices you make this year can change the direction of your financial future, say Chicago bankruptcy lawyers.

Reduce your mortgage payment
That's right: you don't have to settle for a mortgage payment worth more than what's fair. We're entering 2012 with interest rates at historic lows. The Home Affordable Refinance Program is making it possible for a small percentage of buyers to refinance their mortgage terms at a more affordable rate, resulting in savings of potentially hundreds of dollars each month.

Unfortunately, Uncle Sam's rescue plan doesn't work for everyone. What about homeowners who lost their jobs, and have no paycheck to make home payments - even more affordable ones? Or what about those of us who have little to no equity left in our home thanks to sinking home values? A Chapter 13 bankruptcy filing has the ability to stop foreclosure - no matter how many payments you've already missed - and to eliminate unsecured debts like medical and credit card bills so that you can start comfortably making payments again.

Be careful of credit
Credit provides a short-term solution when you're short on cash - unfortunately, it comes with long-term consequences. When the economy and our wallets are hurting, credit card companies know we're looking for a quick solution. That's when they jump in with enticing perks, rewards, and money back guarantees.

But while your card might temporarily keep the bills paid, you'll eventually be trapped with thousands in credit card debt - debt that can threaten your home, your job, and your sanity. Too much debt can mean higher interest rates, garnished wages, and harassment from creditors.

Again, this is where Chicago bankruptcy can offer a solution. Unlike your credit card, bankruptcy can lower or obliterate your debt for good. If you qualify for Chapter 13, you'll be able to keep assets like your home and vehicles while protecting your good name.

Plan for the future
When times are tough it's hard enough to live for the day, let alone imagine what you'll be doing 10 or more years down the road. But life goes on and we have to believe that the economy will get better.

The choices you make today will affect your quality of life tomorrow. If you're not setting aside an amount for retirement in a savings account, a 401k, or an IRA, make 2012 the year you start. Everyone deserves a comfortable retirement. We're not talking extravagant, but wouldn't it be nice to enjoy a few hobbies and vacations in addition to food and electricity? If you're not there yet, it's time to start planning. If you're overwhelmed by credit card bills, an underwater mortgage, or other forms of debt, bankruptcy may be a viable option.

Make this the year you explore all your options, from negotiating with lenders to finding relief through a bankruptcy filing in Chicago.

Continue reading "Tips for Eliminating Debt in 2012 with Help from a Chicago Bankruptcy Filing" »

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 " »

A recent survey found that nearly one in two Americans can't make ends meet and pay basic bills in today's economic situation.

Chicago bankruptcy lawyers understand that times are tough right now. The economy has few signs of improvement and, generally, people are struggling to put food on the table and keep a roof over their head.

For a lot of these people, it's the constant threat of credit card companies, their collection agencies and other debts that have caused these problems. The lack of available funds are tied up in making low or minimum payments to credit card companies.

Considering bankruptcy in Chicago can help consumers get out of the problems they have encountered. Many debt problems aren't the fault of the consumer, necessarily.

Job loss could be a function of the economy and surprise medical bills can level a family. Lenders' high interest rates and exorbitant fees on late or missed payments can also contribute and make a bad situation worse.

A recent survey by Wider Opportunities for Women found that 45 percent of Americans live in households that struggle to pay their bills. That amounts to 39 percent of adults and 55 percent of children.

According to a recent Reuters article, the survey found that a family of four with two working adults pays $821 for housing and $707 for food each month. A single worker family pays about $688 for housing and $244 for food.

Those numbers don't account for vacations, hobbies, college and other expenses beyond the essentials. Some are worried that because a committee of lawmakers failed in its efforts to cut down debt by $1.2 trillion over 10 years, there may be cuts in programs that offer financial support. .

The article goes on to say that the poverty rate is $22,314 for a family of four and about 15 percent of Americans are at that level or below. Many more are just above it and require government assistance to get by.

For many of these people, filing for bankruptcy in Chicago would go a long way toward helping. For those who have some income but who are drowning in debt, Chapter 13 bankruptcy in Chicago may be a good option. This allows people to keep their assets and make a payment plan over three to five years to pay back a portion of the debt.

Chapter 7 bankruptcy is the most common form of bankruptcy and is typically for people who have no income and few assets. Their debts are cleared and they are allowed to continue on without making debt payments.

Both forms of bankruptcy can be helpful, depending on the circumstances. If you find yourself making large payments on credit cards or other forms of debt and teetering on financial disaster, bankruptcy may help. Eliminating debt can free up money to help pay other bills, which could help your economic status.

Continue reading "Bankruptcy in Chicago Can Help in Tough Economic Times" »

A recent Forbes article reports helps consumers figure out how to obtain a credit card, opining that lenders are being more strict with who gets one of their shiny pieces of plastic.

But according to creditcards.com, there are more than 400 million credit cards in circulation in the United States and industry experts believe that companies are sending out offers at record levels.

Many people believe that the amount of credit available in the United States has actually increased, which has led to a decline in the number of Chicago bankruptcies reported in 2011.

Typically, in times of tighter credit, more people are willing to consult with a Chicago bankruptcy lawyer and go through with the process than when more credit is available. That's simply because when more credit is available, people will take it, especially if they are in a financial bind.

But this isn't necessarily a good thing. When these credit companies extend offers to consumers, it's to make them money, not to actually help the consumer. These companies aren't designed to lend out money with zero return. That's why they pack in hidden fees that crop up when payments are late or if certain requirements aren't met.

Interest rates can spike at any time and the "perks" and "rewards" offered typically require huge amounts of spending so that even if a person gets the perks, they end up paying for it i the end. It's not really a perk, after all.

The Forbes article goes on to say that a 720 credit score used to be considered good, but the author believes that credit card companies are considering 750 an "excellent" score. The analysts in the article believe that credit card companies are being more conservative.

But that mainly applies to simply handing out premier interest rates. Anyone can get a credit card and fall into the traps set by card companies. Other news media have reported that there are record numbers of credit card offers being mailed out daily.

Some tips for consumers searching for a credit card:

Payment history is key
Experts believe that people who have a long history of paying their cards on time will likely be able to obtain new cards.

Credit length, diversity is important
Credit diversity means holding different types of loans -- car, home, credit card, store credit. Length of credit simply means showing that you can make payments for years.

Debt-to-credit ratio
Credit card companies don't like to see that a consumer uses one card exclusively and has little on others. They would prefer to see your debt stretched out.

Students who have never owned a credit card before and those under 21 have had difficulty obtaining credit cards since the passage of the CARD Act in 2009. Under the act, they must have co-signers unless they have enough assets or income to obtain a waiver.

Some who get rejected for cards might consider going to a bank and starting a checking account and later seeking a credit card through their bank. There are options, but consumers must be careful. While credit card companies seem to be showing some restraint as far as who they provide cards to, they still want to maximize their business and get as many cards out there as possible. The more cards, the more profit. And that means the more trouble for consumers.

Continue reading "Media Offers Advice On How To Get a Credit Card, But Not the Debt that Follows" »

Banks may at first appear so inviting. Their lobbies are pristine, and their commercials show white-toothed, oh-so-friendly tellers welcoming in customers. It's like being in Disney World.

And then you fall behind by a payment and guess what? They turn into sharks. You get slammed with hidden late fees and they're quick to send collectors hounding you if you owe them money.

It's often these aggressive actions that lead people to seek bankruptcy protection in Chicago and surrounding areas. The bankruptcy process allows for a fresh start after years of debt piling up. Meeting to discuss your situation with an experienced and knowledgeable Chicago Bankruptcy Lawyer can be the first step in saving yourself from years of frustration in the future.

CNNMoney recently chronicled an issue among mourners who are being hounded by banks over the debt of deceased loved ones. Banks are seeking to give them "opportunities" to assume the debt of relatives who have recently died.

By one woman's account, she was sent a letter from a bank within weeks of her mother's death. They offered her a rate of 0 percent APR for the first six months, only to have the rate jump to 13.2 percent after that to pay off her mother's credit card debt. Social Security provided the bank with the information.

While insensitive, banks are well within their rights to collect debt, whether from a relative or from the estate of the person who died. So, if you think you can max out your credit cards before you die and the debt will go with you to the grave, you're wrong. Banks are cut-throat about these things and will go after your family members after you've died.

Another woman was called 48 times a day by a bank debt collector within days of her husband's death. During the wake, an answering service was set up so family members could listen to friends calling to wish condolences. Instead, they heard an automated caller every 15 minutes seeking payment on debts and threatening foreclosure.

In community property states, which Illinois is not, assets acquired during the marriage are considered jointly owned and therefore debt on them will be the responsibility of the surviving spouse. In other states, spouses likely won't be liable for their deceased loved one's debts unless they co-signed on a loan or have debt on a joint account.

The Federal Trade Commission has a mandatory "cooling off" period after death that was recently imposed, but that applies to third-party collection agencies and not banks, which are regulated on a state-by-state basis. That means it may be possible for banks to harass a widow or widower the moment they find out the person owing money has died. It's this kind of heartless action and the other aggressive tactics banks take that lead people deep into debt.

Bankruptcy protection offers protection to consumers. One great benefit of bankruptcy is it immediately stops a creditor or bank from calling. They are banned from communicating with you while you go through the bankruptcy process, as you attempt to get your affairs in order.

For many people, at the end of the bankruptcy process, they will come away without any outstanding debts and no more money-seeking callers. Wiping out debt and being able to move forward without the nagging calls, e-mails and letters can be a refreshing and rewarding feeling.

Continue reading "Banks Hound Mourners over Chicago Debt After Loved Ones Die" »

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" »

The old saying goes that the only things guaranteed in life are death and taxes.

Well, add bills to that expression because we all know that hardly a day goes by without most of us receiving some kind of bill or invoice. Think about car payments, mortgage or rent payments, credit card bills, medical bills, insurance fees and more.

Add childcare fees to that seemingly never-ending list. A recent story on CNNMoney states that the cost of child care has risen by leaps and bounds during the past decade. Parents are struggling to pay for daycare and babysitting duties while they continue to work in order to provide good home, food on the table and other necessities.

Some may consider how filing for bankruptcy in Chicago can give families a good amount of relief from debts as they tackle bills that require cash. For families with expensive childcare bills, consulting with an experienced Chicago bankruptcy lawyer to discuss the options should be on the list of priorities.

The story states that the average cost of raising a child up to age 18 averaged about $226,920 in 2010 for middle-income, two-parent families. That's up 40 percent from 2000, when the average cost was $165,630.

Experts say that simple cost-of-living expenses have lead to the spike in childcare costs. Everyday tasks such as buying groceries, paying for gas, and covering basic child-rearing expenses -- diapers, baby food and clothing -- have also been skyrocketing.

Of the $226,920 it takes on average to raise a child, this is the average breakdown in costs:

• Housing: $69,660


• Child care/education: $39,420


• Food: $36,210


• Transportation: $30,900


• Misc: $19,110


• Health care: $18,420


• Clothing: $13,200

The transportation organization AAA reports that transportation costs -- with the rise in gas costs -- have squeezed consumers by about 85 percent more in the last decade. With companies scaling back on jobs and even medical and healthcare benefits, it has taken a toll on parents to come up with the extra cash.

Analysts have found that childcare costs have soared to heights unseen before. For some, they pay more for child care than the mortgage or rent on their home. And if parents don't pay for child care, they can't work, so it's not a flexible bill.

This sometimes leads parents to fall behind on other bills in order to pay for childcare service. They sometimes take second jobs or work longer hours, if possible, to make more money to keep the household running smoothly. This may lead to more income, but it also leads to parents and children roaming farther from each other and can cause a stressful situation.

Some parents have bills they consider to be "flexible." But those are the ones that can come back to haunt them, as credit card companies use hidden fees and high interest rates to hit consumers hard when they least expect it.

This is where bankruptcy in Chicago can come into play. By eliminating debts and having bills wiped clean or at least driven down, bankruptcy can allow parents to focus on the most important bills, like day care, school activities and family enrichment. All the things that can truly benefit your kids.

Continue reading "Rising Childcare Costs Lead Families to Consider Chicago Bankruptcy" »

With many colleges and universities back in session after the summer months, students have a lot to deal with -- which classes to take, with whom to make friends and where to live.

But, as the New York Daily News reports, they must also consider which credit card to get. Many college students get overwhelmed by debt, especially if they're unable to find work. While a credit card can come in handy in tight spots, many students get through years of higher education not only with big student loan bills, but also mounds of credit card debt.

And this credit card debt can lead to a Chicago bankruptcy filing if students aren't careful to avoid the pitfalls of credit cards, such as their short-term low interest rates that balloon over time as well as hidden fees that can make a purchase much more expensive that the sticker price.

Bankruptcy in Chicago can help students who get out of school drowning in debt. After spending four years barely getting by financially, finally earning a degree is quite an accomplishment. But then having creditors hounding for payments and making life miserable all while trying to build a career can negatively impact quality of life. Consulting with an experienced Chicago Bankruptcy Lawyer and considering how bankruptcy will allow you to eliminate most of your debt may be a smart decision in order to free up time to focus on a new career and new life.

The New York Daily News article looks at at several credit cards that are geared toward students and how they may be beneficial to those seeking their first line of credit. Despite the recommendations, it's always buyer beware with credit cards. They are a company looking to make money and they do it by charging their cardholders excessive fees and interest levels in order to maximize profits.

The article's suggested cards:

CapitalOne Journey Credit Card: The article states the card has no annual fee and is designed to help students learn how to build credit. Cardholders get text and email alerts to keep payments on track and the card offers a bonus for paying on time. But for those who carry a monthly balance, be prepared to pay a 19.8 percent APR.

Citi mtvU Platinum Select Credit Card: The card has no annual fee and allows students to earn points for every dollar spent. The points can be redeemed at restaurants, movie theaters, bookstores and music stores. Maintaining a good GPA also allows for bonus points. The initial APR is 0 percent, but it climbs to as high as 22 percent.

Discover Student More Card: This card also has a rewards system and no annual fee. The rewards program allows for 0.25 percent cash back, but based on quarterly rotations, the "bonus" categories can earn 5 percent cash back. Interest rates can climb to 21 percent after a nine-month 0 percent APR period.

Continue reading "College Credit Card Debt in Chicago Can Get Out of Control Without the Right Plan" »

A recent poll by the financial data publisher Bankrate.com indicates that 24 percent of American consumers have no emergency savings, The Associated Press reports.

It's not an entirely shocking statistic, but it is concerning. Those without savings are flying by the seat of their pants, especially in this rocky economic climate because job loss is a very real prospect for many in Chicago. A lost job without much of a back-up plan can lead to consumer debt, which can pile up without notice.

This type of bad fortune, coupled with necessary spending, can lead to bankruptcy in Chicago. While to some that may sound like a devastating outcome, others see the intrinsic value in the process and its outcome. But hiring an experienced Chicago Bankruptcy Lawyer is essential to navigating the complex bankruptcy codes.

The story suggests that only 24 percent of people have the recommended cushion of at least six months' expenses set aside for emergency situations. Most people aren't prepared for contingencies and another 24 percent have no emergency savings at all.

About 6.2 million people are out of work for half a year or longer and the poll results show that people are woefully unprepared for a time when job security and the economy are such concerning topics.

"The majority of Americans still have much work to do in building an adequate emergency savings cushion," Greg McBride, senior financial analyst for Bankrate told The Associated Press.

McBride said the survey's results were surprising given that so many people have seen the effects of the 2007-2009 recession and haven't planned for emergency savings. Yet, the challenges of the economy have made it difficult for people to store away money.

Respondents under 30 with annual incomes under $30,000 were most likely to report having no savings at all. Those likeliest to have six months of expenses in a fund were higher-income households and people in their 50s and 60s.

Less than half of those who participated in the poll had about three months of expenses, which was the same figure as a 2007 poll. Other findings:

• Feelings of financial security declined slightly to 97.8 in June from 98.5 in May. A reading under 100 shows how less financially secure people are feeling compared to a year ago.
• About 26 percent of those polled said they were comfortable with their debt compared to a year ago, while 19 percent say the opposite.

Let's face it -- it's much easier to build up savings when you're an executive for a Fortune 500 company, a doctor, lawyer or engineer making a six-figure salary. But most people aren't in that boat. The cost of raising children, no raises, pay cuts and the unexpected flat tire or water heater that goes out adds up and it's just difficult to keep up with bills.

Toss in a lost job, freak accident causing hospitalization or predatory lenders who slam consumers with fees and interest, and it's easy to see why people fall into debt the cannot handle.

But the collection calls can be stopped and it can be done through bankruptcy. Chapter 7 bankruptcy, by far the most popular form of filing, allows people to consolidate their debt and have it discharged, making for a fresh start financially.

Continue reading "1 out of 4 Chicago Consumers Have No Emergency Savings Plan" »

The Lexington Herald-Leader recently reported about a couple in Kentucky facing $70,000 in federally insured student loans, despite dropping out of school because of family problems and defaulting on the loans.

The couple is now buried and debt, yet haven't filed for bankruptcy. While it's true most student loans cannot be discharged, filing bankruptcy can still help those struggling with such debts. And more help may be on the way to deal with predatory lenders in the student-loan sector.

Lawmakers recently introduced legislation that would allow students to discharge commercial student loans in bankruptcy proceedings, reversing a 2005 law, according to U.S. News & World Report.

Even without the law change, filing for bankruptcy in Chicago is a way to eliminate debt that is causing stress, hardship and frustration. But the first step is consulting with an experienced Chicago Bankruptcy Lawyer who can help explore all options and determine the best avenue for you based on the laws in place.

According to the news report, the national average for a three-year default rate for 2008 is 13.8 percent, according to federal data. Private, for-profit "career colleges" tend to have the highest default rates because of how expensive tuition is compared to the average salary upon graduating.

While it's possible that some student loans can be considered an "undue hardship" and can be discharged, it requires showing a bankruptcy court judge this is the case. If you are able to work, this can be difficult.

But according to U.S. News & World Report, the law may be changing. With college costs rising and the economic climate getting worse, a change to the bankruptcy law would be helpful for many people.

Both bills introduced in the U.S. Senate and U.S. House of Representatives would restore the ability to discharge commercial student loans in bankruptcy proceedings, reversing a 2005 change to the law for borrowers who find themselves unable to make payments on their loans.

"Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans were protected during bankruptcy," said Sen. Dick Durbin, D-Ill., in a press release. "This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. Today's bill would restore the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy."

The law change is particularly crucial in today's economy, where only 56 percent of 2010 graduates were able to find work, according to a study by the John J. Heldrich Center for Workforce Development at Rutgers University.

But even without the law change, if it happens, bankruptcy can be helpful for those struggling with debt that is brought on by student loans. While discharging the student loans can be difficult, filing for bankruptcy can offer the opportunity to eliminate other debt, making it easier to pay back what is owed. Being mired in debt is difficult on anyone and using the laws to protect consumers can provide a fresh start for Chicago families.

Continue reading "Chicago Bankruptcy Can Help Students With Debt Caused By High College Loans" »