Chicago Bankruptcy Lawyer Blog

The recession may be good for something after all: getting rid of debt.

On the one hand, tough economic times are making consumers more reliant than ever on credit, say Chicago bankruptcy attorneys. Many of us have been piling new debts on top of the balances we carried before the recession hit. On the other hand, that extreme financial distress is encouraging consumers to do something many of us once thought unthinkable - file for bankruptcy.

And, lo and behold, we're finding out that it works.

Continue reading "More Consumers Turn to Chapter 7 Bankruptcy to Relieve Debt, Say Chicago Bankruptcy Attorneys " »

Americans spent more - but earned less - in January, say Chicago bankruptcy attorneys.

Personal spending was up 0.5 percent in the first month of 2010, according to The Commerce Department. That would seem to bode well for economic recovery, except that incomes in January rose by just 0.1 percent, much less than what economists had predicted - and the worst rate in four months.

There's good and bad news. First, the bad. As a result of more spending and less money, the savings rate has dropped. Last year Americans saved 4.3 of our incomes - the highest rate in over 10 years - but in January we only saved 3.3 percent. We might be spending more now, but without raises (and in some cases, jobs) we could eventually run out of steam, stifling economic recovery. But here's the happy news. Our savings rate is still a huge improvement over the negative rate we had before the Great Recession. And hopefully we can keep it up by slowing our spending to match our incomes.

I know it's not easy, especially when the recession - and the threat of layoffs and foreclosure - drags on. But there are ways to make saving money a little easier.

Continue reading "Chicago Bankruptcy Attorneys Say Americans Spend More But Earn Less" »

If you look hard enough, you can always find some good news to temper the bad.

This week's depressing newsflash informed us that employers cut 20,000 jobs last month - more than economists expected, and enough to threaten a recent dip in unemployment and shake up the stock market, according to Chicago bankruptcy attorneys.

The good news? Getting that loan might not be so difficult. Banks have are finally stopped tightening the standards they've been placing on most loans - a sign that credit woes might finally be easing. And according to the Fed, far fewer banks believe the value of the loans they hold will continue to deteriorate. Of course, this doesn't mean banks are easing up on any of the restrictions already put in place - but you can't win them all.

Economic recovery might not be happening overnight, though it is likely in the works. But you can use this time to your advantage. Why not get your finances back in shape so when the economy does pick up, your luck will, too?

Continue reading "Layoffs Increase While Credit Troubles Improve, Say Chicago Bankruptcy Attorneys" »

The early bird gets the worm - and sometimes the tax refund.

Just because tax deadline day is April 15 doesn't mean you have to wait until then to file, according to Chicago bankruptcy attorneys. Sure, most of us look at the filing process as a chore to be put off until the last possible minute. But with all sorts of new credits and deductions added to stimulate the economy, you might want to get it over with early and get some money back in your pocket sooner rather than later, especially if you're in debt.

Continue reading "Chicago Bankruptcy Attorneys Point Out Benefits Of Early Tax Filing" »

Do you ever get the feeling that you're eating up your paycheck faster than you can spend it? You're not just imagining things, according to Chicago bankruptcy attorneys.

Prices of grocery items like bread, milk and meat are rising faster than most salaries. The average American family of four spends about $600 a month on groceries -- or about $7200 annually. If you make $40,000, it's like you're devouring one-fifth of your paycheck - probably closer to one-quarter if you count all those restaurant meals.

Food obviously isn't something you can cut out of your budget, but that doesn't mean you can't save money on groceries. The kind of food you buy, when you buy it and where you buy it can potentially save you thousands of dollars a year and even improve your health, which could in turn lower your medical bills.

Continue reading "Chicago Bankruptcy Attorneys Tips for Saving Money on Grocery Shopping" »

It's nearly impossible to turn on the TV or computer without being startled by images of the dire situation in Haiti. And while we all wish that we could undo the damage (and many of us are generously opening our wallets to help try), we can also take home a lesson from the tragedy about the real meaning of hardship.

Many of us are struggling to pay the bills and fend of foreclosure. But regardless of what our outcome is, most of us will have food, running water and a roof over our heads - whether it's in a roomy house or a shared apartment. Worst case scenario, we have family, friends or organizations available to help us get back on our feet. Haitians don't have that luxury right now.

Now, I don't mean to indicate that we're in any way superior just because we're American. Lucky, is more like it. What happened in Haiti two weeks ago is a combination of geography, economy and pure bad luck. And hopefully, the country will be able to rebuild with global help so that, whatever happens in the future, they'll have the infrastructure and resources to survive. My point is, no matter what your situation, it could always be worse. There is always a reason to be grateful -- even when debt seems to be running your life.

Continue reading "Finding Debt Relief Might Be Easier Than You Think, Say Chicago Bankruptcy Attorneys" »

Bad news for married women (or good news for men): wives are no longer seeing the economic returns that they once did from marriage, Chicago bankruptcy attorneys say.

On the upside, women have come a lot way since 1970 and earlier, back when marriage meant a significant boost in income courtesy of their husband. We've surpassed our male counterparts in both education and salary over the past four decades. More men than ever are married to women who earn more than they do and, vice versa, more women are married to men who earn less. In fact, nearly one-quarter of women earn more than their husbands today, compared to a measly 4 percent in 1970, according to the Associated Press.

But there's still a major inequity. Though we've been increasing our earning power, women are still earning just 78 cents for every dollar a man takes home. And much of that hard-earned income is going to bills for debt.

Continue reading "Chicago Bankruptcy Attorneys Say Marriage No Longer Means Economic Benefits for Women" »

Those late payments can cost a lot more than the late fees they result in.

When consumers take longer to pay their bills, businesses have less cash handy to pay their own bills, setting off a cycle that slows down the entire economy, Chicago bankruptcy attorneys say. Statistics agree. Legal firms, for instance, received payments approximately three days later in 2009 than in 2008, according to financial information firm Sageworks. Architectural and engineering businesses waited closer to five days longer, while poor tax preparers and bookkeepers saw wait time for their money increase by 10 whole days.

In most cases, the economy is out of our control. But this might be the one time when you can make an impact on the bigger economic picture. By reducing your debt, you can free up funds to pay your bills on time, bidding adieu to late payment fees and boosting the economy at the same time.

Continue reading "Chicago Bankruptcy Attorney Tips for Avoiding Late Payments" »

The recent recession did more than change our finances - it also changed out attitudes, according to Chicago bankruptcy attorneys. And that's a good thing.

Many of us are vowing to make 2010 the year we finally find freedom from debt. And our new treatment of money means some of us have a head start we didn't even know about. How did it happen? Many Americans lost work hours or changed jobs in the past year or so. But instead of simply cutting back by the amount we gave up in salary, we've been changing our lifestyles. We're doing more with less.

Yes, some of us are working longer hours to make ends meet, but the vast majority are filling some of that extra time with not looking for new work, but finding new hobbies - cooking more at home, starting a backyard garden, taking classes at the local community college, reading books, checking out museums and other cool stuff in our hometowns, getting outside or - here's a novel idea - actually spending quality time with our families. Crazy, I know. Fortunately, there's a way to balance our new lease on life with debt-free future - bankruptcy.

Continue reading "Chicago Bankruptcy Attorneys Explain How the Recession Is Helping Us Live Better with Less Money" »

We all know it's the thought that will count when we rip off the wrapping paper tomorrow. But that doesn't change the fact that some presents just aren't the right fit (sometimes literally).

With money tight, I don't think it's selfish to admit that we want to make every gift count - especially when we've shelled out a mini-fortune to buy presents for friends, family and co-workers. Fortunately, the same economy that is making our wallets thinner might be making it easier than ever to return or exchange gifts post-holiday.

According to MSNBC.com, certain retailers are extending return deadlines and making the rules for returning items more lenient.

Continue reading "Returning Gifts Gets Easier Thanks to Recession" »

Good news on the job front. With the economy picking up steam, employers are again warming up to the idea of raises, bonuses and 401k matches, according to USA Today.

It's a welcome change going into the new year. But it also brings up a couple good points.

First, getting a boost from your boss is not a given. As the article pointed out, 40 percent of employers said they plan to review salaries based on employee performance next year, according to a Towers Perrin survey. You might already know this, but a poor economy is no time to be slacking off. Nor is an improving economy, as businesses might be preparing to hire again - and there are plenty of experienced, educated and job-hungry candidates flooding the market.

Second, and maybe most important, a raise doesn't necessarily mean more money. As a wise old man once said, it's not the size of your wallet that counts, but the way you spend it.

Continue reading "Chicago Bankruptcy Lawyers Say Workers Could See Rise in Raises and Benefits" »

We often hear about how we shouldn't rely so much on credit. But rarely do we hear the other side of the story - the fact that many of us could no longer qualify for more credit if we wanted it.

Just a few years ago, lenders were handing credit out like candy - in the mailbox, at stores, on college campuses and through subprime mortgages. Heck, I even know 5-year-olds who were offered credit cards through the mail. But if banks are at fault for giving out credit consumers couldn't afford, we have to take some blame for spending what we couldn't afford. Many folks (myself included) once used that credit as an excuse to spend more than we earned. The end result? An economic meltdown that's caused consumers to default on their debts - and scared banks to get stingy with future credit.

So if credit is so dangerous, what's the problem if we have less of it? Because our economy needs some credit to get back on track.

Continue reading "Consumers Credit Is Getting Harder to Come By" »

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

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

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

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

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

If your financial state has you struggling for something to be thankful this year, take heart - at least your holiday meal won't cost as much as last year.

For the first time in almost a decade, the price of a Thanksgiving meal has dropped.
A traditional dinner of turkey, mashed potatoes and gravy, stuffing and all the fixings will cost an average of $42.91 for a group of 10 people, roughly 4% less than it did a year ago, according to the American Farm Bureau Federation.

It might be hard to imagine (I know I grit my teeth every time the grocery store clerk rings me up) but food prices have indeed declined as a result of lower energy costs and the effects of the recession. As an economist noted in a farm bureau press release, the cost of a Thanksgiving meal now costs less per person than a fast-food restaurant "value" meal. Such savings often goes unnoticed as we struggle to put food on the table while our boss is freezing wages and eliminating bonuses - or, worse, cutting our job. But, since this Turkey Day is all about giving thanks, there's no better time to focus on the positive.

Continue reading "Thanksgiving Meal Costs A Little Less This Year" »

Economists have spent weeks pointing to signs that the recession is over, but many Americans are having a hard time believing it.

Despite a pickup in retail, real estate and the stock market, foreclosures are still on the rise, increasing 5 percent just since summer. Unemployment - right now at a 30-year record of 9.8 percent - continues to edge upwards. The cost of living, as always, is outpacing our salaries. And we're more in debt than ever. The economy might be starting to expand on paper; in real life we're still feeling its effects - and might be for some time.

But despite all that, there's good reason for optimism. First, understand that some of the bad news can be attributed to a lag effect. People are still out of work because employers don't want to rush into spending money until they can confirm the economy is recovering - or they may not have the money to spend, period. And when folks aren't earning money at work, it's awfully hard to make their mortgage payments - meaning foreclosures will naturally go up for awhile. In short, just because an expansion isn't obvious right away, doesn't mean it's not there.

Second (and probably more importantly) realize that most folks can improve their financial situation whether the economy recovers today or tomorrow. You don't need to wait for the end of the recession to have a clean slate! Your financial freedom rests in your hands.

Continue reading "Create Your Own Economic Recovery When You Eliminate Debt" »