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 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" »

Prolonged periods of financial struggle are taking a toll on the psychological health of many Chicago families - kids included.

A recent Chicago Sun-Times article examines the effects of long-term unemployment and foreclosure on children. Currently, unemployment rate in Chicago is hovering above 9% and more than 138,000 homes in the Chicago metro area have gone into foreclosure since the recession began - that's one in every 27 houses.

While all age groups can suffer from financial distress, studies are showing that uncertainty and stress can affect the behavior of kids in school and, later in their lives, in the workplace. Children may become withdrawn, act out in class or at home, or experience depression. Kids with a father who lost a job were more likely be suspended or expelled from school, while children with low-income mothers out of work were 40% more likely to exhibit problem behavior.

As parents, we can't control the economy for our kids - but we do have some control over how we react to economic changes. Maintaining consistency is key, say experts. A Chicago bankruptcy filing may be able to help.

If you've lost a major source of income or are drowning in debt, Chapter 13 bankruptcy can protect your home from foreclosure and help you get back on track with payments. Shielding your kids from the upheaval of losing a home, finding another place to live, and moving to a new location can go a long way toward making this tough time more manageable. Meanwhile, with the burden of the mortgage out of the way, it will be easier to focus on managing the credit card debt that often makes house payments so difficult.

If you've been out of work for an extended period of time, Chapter 7 bankruptcy may be able to eliminate your debts in entirety - in many cases, while also allowing you to keep assets like your home - so that you can devote more time to finding work and less time battling bill collectors.

In a recent blog post, our Chicago bankruptcy attorneys looked at how bankruptcy can allow enough financial breathing room for the unemployed to take on part-time jobs, which are more readily available, as a stepping stone to full-time employment. Look at it as a fresh start for you and your family.

Meanwhile, an article by the Family Education Network offers up some tips on how to discuss job loss with children.

Be Honest - To an Extent
Often times, uncertainty is even scarier than reality. Be upfront about your job loss. You don't have to give your kids the specific details of your finances, but be open about what changes they can expect. That said, don't speculate out loud about unknowns like foreclosure, which could just leave them more worried. Make sure your kids know that whatever happens, you'll get through it together.

Money Lessons
If your child wants to go to the mall or get the latest electronic gadget, this can be a good opportunity to talk about restraint. You may want to mention that things have changed, and you won't be able to afford everything that was possible before. It's important to stick together, and that means saving money together.

Stick to a Routine
Whether it's sitting down to dinner at the same time every day or enjoying a favorite family activity on the weekend, find ways to spend quality time with your kids. Unemployment is not an ideal situation, but maintaining a routine and making sure your children feel loved will help them hold onto some security when many things around them are changing.

Take Care of Yourself
Alcohol abuse, depression, and domestic violence can be an unfortunate side effect of unemployment and other financial struggles. It's often these issues, not the lack of money, that impact kids most. Take care of yourself so that you can take care of your kids. If you need help, ask. Many counties offer no-cost or low-cost family counseling services.

Continue reading "When Tough Economy Takes Toll on Psychological Health, Chicago Bankruptcy May Help" »

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" »

When some people consider bankruptcy, they think about going through a process where debts are forgiven and the prospect of having to give up some or all of their property and other assets.

But there is a form of bankruptcy in Chicago that could help people who want to keep their homes, cars and other possessions.

Under Chapter 13 bankruptcy in Chicago, consumers are allowed to have some of their debts forgiven. But they must set up a payment plan that typically lasts between three and five years to pay back some of the debt.

Once the plan is completed, the balance of the debt owed is wiped clean. Chicago bankruptcy lawyers have seen many consumers helped by this form of bankruptcy, as they are able to stay in their house and still have their debts cleared. In many cases, Chapter 7 filers can stay in their homes and keep their debts, too. Each case is different.

One major benefit of bankruptcy in Chicago is that filing immediately stops a foreclosure. This is particularly important when considering our current real estate market both in the Chicago metro area and statewide. Prices are down and foreclosures are up and the values of homes have dropped considerably.

Whether you have missed one mortgage payment, five payments or your house is scheduled to be sold at auction immediately, bankruptcy can help. Simply filing for bankruptcy will immediately stop your house from being taken away.

Once you go through the bankruptcy process, you may be able to regain possession of the house after all is said and done. Chapter 13 bankruptcy can be helpful in certain situations, even if you make some mistakes with your mortgage.

Here are some tips from a U.S. News & World Report article that may help you avoid major mistakes with your house:

Check your credit: Not checking your credit can lead to high interest rates or strip you of the chance to get a mortgage at all if your credit score is below standard. Save yourself time and disappointment ahead of time.

Stick to one loan: Avoid taking out another line of credit while seeking a mortgage loan. This, too, can affect your credit score.

Look at the total house payment: Principal, interest, taxes and insurance goes into your payment. Look at all aspects.

Payment history: Make sure you have a history of making payments on time.

Employment history: Job hopping can hinder your mortgage rate.

Preparation is key: Make sure you get pre-approved before you apply so that you know you will qualify for a mortgage loan.

Shop around: Don't just take the first rate you get approved for. Look at different lenders to find the best option for your situation.

Too good to be true?: Get the best rate, but don't chase any deals that seem great.

Lock your rate: Fixed-rate mortgages are important because those that adjust can cause major problems.

Read your loan documents: Take the time to look at closing documents and don't just assume everything works for you. Ask questions.

Continue reading "Chicago Bankruptcy Prevents Foreclosure, Even if You Make Major Mortgage Mistakes" »

Our nation's economy and the world's economy has struggled to get recover after years of bank business that went largely unregulated.

After the collapse of the United States' real estate market, things have been slow to recover. After years of prosperity in the mid 2000s, times have quickly turned bleak as banks and other businesses began laying people off and cutting back in such a tough economy.

With housing prices plummeting and people losing their jobs, foreclosures have gone on the rise in Chicago and elsewhere throughout the country. At a time like this, bankruptcy in Chicago must be an option worth considering.

Homeowners are losing their jobs, which is forcing them to stop making monthly mortgage payments. After only a few missed payments, banks are calling and writing letters, urging homeowners to either pay up or get out. But without an income, Chicago bankruptcy lawyers know it is impossible to meet such demands.

Kiplinger recently reported that President Barack Obama's plan to help the housing market has done little to relieve the pressure. After promising that government-backed mortgage programs would help millions of families, the President's programs were largely unused by banks and did little to actually aid homeowners.

As Kiplinger reports, the President's new plan would target "underwater" borrowers -- people whose homes are worth less than what they're paying for them -- to help ease their burden. But the plan doesn't help in addressing the root problem that caused the real estate meltdown.

While foreclosures are the public face of the housing market crash, the underlying issue is what sinking home values have done to equity. Equity in houses is down $7 trillion, or 50 percent since the crash. As a result, many consumers have cut back on spending, which makes up 70 percent of economic activity nationwide.

With a glut of foreclosed homes on the market, it could take years or even decades before prices return to what they were pre-recession. Either way, it's likely that the problems will keep consumers wary of making such a big investment.

The President's initial plan was to help 3 to 4 million homeowners, but the number is less than 1 million. The new goal is to help just over 1 million underwater homeowners, but Kiplinger predicts this isn't possible without home prices rising.

It's obvious that these government-backed programs are being shunned by banks as they find it more profitable to go ahead with foreclosure rather than work with homeowners. But bankruptcy in Chicago is a way to prevent foreclosure without the banks' cooperation.

In bankruptcy, whether an owner has missed one payment or 10, the foreclosure process stops. As unsecured debt such as credit card bills and medical debt gets eliminated, the homeowner can come out of bankruptcy able to make payments on a house. And when the process is ongoing, homeowners can typically stay in their homes.

It's not always the case that a consumer will lose their house after the bankruptcy process is completed. In fact, in many cases they keep their home, get rid of the rest of their debt and can continue making payments.

Every case is different and discussing it with a skilled bankruptcy lawyer should be a homeowner's first priority if they are struggling with debt and are unable to make payments.

Continue reading "Chicago Bankruptcy Aids in Foreclosure Prevention Unlike Fed Plans" »

A recent Wall Street Journal article looks at deficiency judgments, which are court orders that banks can get to force homeowners to pay the difference between what the home sells for and what remains owed on the loan.

This is a terrifying prospect. A homeowner loses his or her job and is forced to stop making payments on a home they want to keep. The bank is unwilling to modify their mortgage, so they're stuck.

Without notice, some months later, they get a phone call or a letter. It's the bank telling them a judge signed off on a deficiency judgment against them. This is after the bank took back their house, sold it at auction for significantly less that what was owed, and now wants the difference in the loan paid to them.

This is happening with great frequency as banks are unable to cope with the losses from home loans gone bad nationwide. There are millions of homes in foreclosure and the losses for banks are staggering. But there is a solution -- bankruptcy in Chicago.

Under certain forms of bankruptcy, there are ways for people to hang on to their main house even if a vacation house is in foreclosure or has already been sold by the bank. Chapter 13 bankruptcy allows for people to make payments over a three to five year period in order to discharge all the money they owe. Other forms of bankruptcy allow all the debt to be removed without making payments.

Consult with an experienced Chicago bankruptcy lawyer if you find yourself in this position. Getting out of debt can be a monumental challenge and it's one that can't be tackled alone.

As lawyers have noted, banks have become more and more aggressive in seeking deficiency judgments. Rather than working with homeowners or cutting them some slack because of tough financial times, the number of deficiency judgments has actually spiked this year as foreclosures have increased. With real estate numbers slow to improve, analysts say it's likely that this strategy will continue to play out for banks who are seeking to get back as much money as they can after the market's collapse.

There are 40 states and the District of Columbia that allow lenders to sue borrowers for mortgage debt lingering after a foreclosure sale. Experts believe banks will use these laws to their advantage as their own companies continue to struggle financially with the rise of foreclosures nationwide. Most banks won't say why they choose to seek deficiency judgments against borrowers, but some say they do it when they suspect borrowers have stopped paying because of a loss of value, not because they can't afford payments.

But one strategy for these borrowers is to consider bankruptcy. If a consumer gets hit with a deficiency judgment, they can file for bankruptcy, which stops lenders from coming after them for that debt. By discharging that debt, the borrower can get away from a six-figure judgment hanging over their head.

Continue reading "Homes Can Be Foreclosed, But Banks Can Come After You For Difference Without Chicago Bankruptcy" »

The Chicago Sun-Times is reporting that foreclosure filings took a huge leap from July to August, another bad sign for homeowners but an opportunity for those struggling with foreclosure to consider bankruptcy in Chicago.

An experienced Bankruptcy Lawyer in Chicago can help, as filing for bankruptcy stops foreclosure in its tracks. While the $75 billion available to encourage lenders to modify homeowners' loans was a fine idea, it hasn't worked. Banks have been unwilling to help homeowners and would rather foreclose on a person's home than help them stay in it.

Therefore, option #2 -- bankruptcy -- is a better fit for many people. If you are behind on mortgage payments, or have received word that your house will be sold at auction soon, filing for bankruptcy will stop the process. Bankruptcy also allows the homeowner to discharge debt or set up an affordable payment plan.

According to the numbers cited by the Sun-Times, foreclosure filings rose 19.5 percent from July in the Chicago metro area. Some experts believe lenders are now finally working through the documentation issues that plagued them in 2009 and 2010 before most institutions severely halted their foreclosure process last fall.

While there was a large increase in filings from July to August, yearly totals are down 28.2 percent from August 2010 to August 2011, which shows just how many foreclosure notices are waiting in the wings as banks start the process over again.

In the Chicago area, 11,226 homes received a foreclosure notice, amounting to 1 in every 337 houses. Statewide, filings rose 17.6 percent from July, yet were down 25.7 percent from August 2010. Statewide, about 12,500 homes received such a notice. National filings rose 7.2 percent from July to August.

The increase in filings likely shows that lenders are getting back on track in attempting to take away people's homes through the foreclosure process. This is bad news and just another reminder of how bad our economy is right now.

Homeowners usually don't go into foreclosure because they simply don't want their house any more. There are usually more deeply rooted problems. In some situations, it could be that they have been diagnosed with an illness that has required days or weeks in a hospital, resulting in overwhelming medical bills. In this economy, with a nationwide 9 percent unemployment rate, it's certainly possible people have lost their jobs and are using credit cards to survive while using whatever money they have to make a mortgage payment.

Whatever the reason, the person is likely in bad financial shape if it comes to foreclosure. But that doesn't mean they should lie down and allow the bank to steal away their home. Filing for bankruptcy in Chicago stops banks from taking homes away from their owners and allows them to stay in it while the process is ongoing. It may be a viable option for you, but we can't help you unless you contact us. Call today.

Continue reading "Opportunity to Consider Bankruptcy as Chicago-Area Foreclosures Increase" »

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" »

A story by CNNMoney reports that new home sales in Chicago and nationwide fell again in June for the second straight month, continuing concerns that the real estate market has yet to fully recover from the Great Recession.

Falling home prices have left many people with mortgages on houses that are upside down in Chicago looking for answers. One answer is filing for bankruptcy in Illinois. Bankruptcy laws allow the foreclosure of a home to immediately stop, stop creditors from calling and wages from being garnished.

The story reports that 312,000 homes were sold in June, which was down from 315,000 in May. The June numbers are actually up 1.6 percent from June 2010, however. But despite the uptick from 2010, economists predicted 320,000 sales.

With a flood of foreclosed homes on the market, new home sales have been one of the weakest sectors of the economy. In July 2005, there were 1.4 million new home sales, the peak. After June's sales, there are 164,000 new homes on the market, which experts believe will take more than six months to sell through that inventory.

According to the S&P/Case-Shiller report, home prices increased about 1 percent in June over May. In Chicago, prices rose 1.7 percent from April to May, but prices are still down about 8 percent from 2010.

Prior to the last few years, buying a home seemed like a good investment. It was considered a good form of bad debt, like student loans, because it was likely it would pay off in the long run. Well, the long run is much longer in just about every part of the country.

With millions of houses in foreclosure, on top of new homes that are being built, the inventory in this country is massive. And the foreclosures have sunk home values. Six-figure houses are now selling for five figures because of the collapse of the market.

And that has trapped many homeowners in their homes, which are now worth much less than the mortgage they are paying. For some, the bad job market, coupled with an expensive house payment, has left them unable to manage.

But there is hope in bankruptcy laws. Whether a house is scheduled to be sold on the courthouse steps tomorrow or if the homeowner has just recently begun missing monthly mortgage payments, bankruptcy can help.

Filing for bankruptcy immediately stops the foreclosure process. It also stops creditors from calling, collection agencies from harassing you and lenders from attempting to garnish a person's wages. The consumer gets protection throughout the process, until a final order is signed.

There are different forms of bankruptcy, however. In Chapter 7 bankruptcy, the most common, debts are forgiven. But this requires passing a means tests to determine how much money a person has and can make.

In Chapter 13 bankruptcy in Chicago, large assets, such as a home, are protected and consumers set up a payment plan, usually over 3 to 5 years, to pay back debt. Which chapter the bankruptcy is filed under depends on the person's circumstances.

But the first step should be consulting with a Chicago Bankruptcy Lawyer, who can assess your situation and determine the best course of action. Bankruptcy laws are designed to give consumers a second chance and they can provide much-needed relief when people believe they have nowhere to turn.

Continue reading "Chicago New Home Sales Slip In June Making Bankruptcy a Good Option" »

The Obama Administration recently announced that it wouldn't allow lenders to foreclose on unemployed homeowners until they miss more than a year of monthly house payments, The Washington Post reports.

While this is temporary good news for homeowners, it's more of a stopgap measure than a real solution. The Federal Housing Administration previously required banks to allow its borrowers to put off mortgage payments for four months while lenders worked out options to keep people in their homes. The national unemployment rate was 9.1 percent in May, while it sits at 8.7 percent in Illinois.

Chicago Bankruptcy Lawyers have seen many desperate homeowners, especially those who are unemployed and scrambling to keep their houses, seek out home loan scams and other programs in the hopes of keeping their homes. But as people remain unemployed, their credit card debt typically increases, leading to extended debt. Some homeowners consult with experienced bankruptcy lawyers and conclude that Chapter 13 Bankruptcy in Illinois is the best option.

The Treasury is expected to ask lenders for a similar deal under its primary foreclosure prevention program, but it lacks authority to require it. As many Americans have discovered, bankruptcy can be a much-needed procedure to get ones finances bank in order after debt piles up.

Through June, there were 709,303 consumer bankruptcy filings, which was actually a slight decrease from about 770,000 during the same period a year ago. But the 119,768 filings in June represented a 4 percent increase from 114,803 filed in May.

Chapter 13 bankruptcy in Illinois means consumers are able to come up with a payment plan that lasts three to five years and allows people to keep their homes if they complete the payments on schedule. People often think of bankruptcy in terms of chapter 7, which is designed for people with few assets and mounting debt; their debts can be consolidated and wiped out through a successful bankruptcy procedure.

Chapter 13 is different because it helps people who have assets, but who have gotten into trouble with mounting debt. As soon as a person files for bankruptcy, creditors stop calling, collection agencies aren't allowed to bother you and your Chicago Bankruptcy Lawyer takes charge and begins working on your case.

This is a complex process and requires a law firm that has helped countless homeowners struggling with debt. Costly medical bills are the number one reason for bankruptcy and with our economy dragging and not producing as many jobs as expected, unemployment is at the top of the list of reasons why a person might consider to file for protection.

Bankruptcy law is designed to help consumers who are serious about fixing their debt problems. It is one area of law that provides protection for consumers and lets them work through their debt in order to move forward.

But keep in mind that the sooner you take action, the sooner you'll be able to get rid of the mound of debt that is causing problems in your life. So, while the President's plan to give unemployed homeowners some extra time off from making payments may help some, high unemployment rates may make it near impossible to get out of debt and keep one's home. But filing for bankruptcy is the one definite way to stop creditors and work to keep your home when debt is getting the better of you.

Continue reading "Unemployed Homeowners Get Temporary Reprieve From Foreclosure" »

A project story by The Associated Press revealed that officials nationwide have found that "robo-signed" documents, which are signed by mortgage servicers without checking the paperwork first for accuracy, are still popping up in foreclosure cases throughout the country, despite ongoing investigations in every state.

Chicago Bankruptcy Lawyers have seen many people put their hopes of saving their home in the idea that there may be a problem with the documentation regarding their home paperwork. And considering all 50 states have ongoing investigations into "robo-signing," fraudulent mortgage sevicers, bank attorneys and bank officials, it's not a shock. But the only fool-proof way of stopping a Chicago foreclosure is by filing for bankruptcy.

While this may not be a solution for everyone, filing for Chapter 13 bankruptcy in Chicago and elsewhere immediately halts the foreclosure process and stops creditors from calling.

The purpose is to allow the homeowner to set up a payment plan, usually over three to five years, to pay off debt and stay in their home. Whether you have just been given notice by the bank that you're in default or your house is scheduled to be auctioned off on the courthouse steps tomorrow, a bankruptcy will stop foreclosure.

According to The Associated Press story, officials in at least three states have discovered thousands of "robo-signed" documents since last fall, suggesting that it is still a widespread problem in the industry. Illinois' Attorney General, along with all 49 other attorneys general, have been investigating financial institutions' use of companies that have signed documents and filed them with courts that aren't accurate but have been rubber-stamped as accurate by other companies the banks hire.

Last fall, the nation's largest banks and mortgage lenders, including JPMorgan Chase, Wells Fargo, Bank of America and an arm of Goldman Sachs suspended foreclosures while they investigated how corners were cut to keep pace with the crush of foreclosure paperwork. Many experts believe a big second wave is coming once banks get their paperwork in order.

Critics say the new findings point to a systemic problem with the paperwork involved in home mortgages and titles, the story states. And they say it shows that banks and mortgage processors haven't acted aggressively enough to put an end to widespread document fraud in the mortgage industry.

While all these problems plaguing the mortgage foreclosure industry may be positive for people trying to stay in their homes, it may not stop a foreclosure. Documents can be corrected, especially when a foreclosure action is brewing. So, if you are banking on bad documents in your mortgage to save your house, you should be consulting with an attorney familiar with foreclosure and bankruptcy in Chicago.

Filing for bankruptcy will immediately stop foreclosure and allow you to work through your debt. Medical bills, job loss and credit card debt are the three top reasons for a bankruptcy and many Chicagoans are facing these challenges today.

Continue reading "Fraudulent, "Robo-Signed" Documents Still Prevalent in Chicago Foreclosure Filings" »

The New York Times reported recently that the number of people who have filed for bankruptcy protection in Chicago and throughout the country is down, but it doesn't necessarily mean the economy is on its way to improving.

In fact, experts believe that bankruptcy numbers simply indicate that lenders are being more generous with extending lines of credit to people in need -- or are slower to foreclose or take other action. Generous they are not. These companies prey on consumers who are desperate to pay their bills and it usually sends them spiraling deeper into debt.

If you are looking for a fresh start, a clean slate and a refreshing end to creditor calls, filing for bankruptcy in Illinois may be a strategy to explore. Chicago Bankruptcy Lawyers have helped countless numbers of Chicago homeowners and consumers who have fallen behind on house and credit card payments. Using the laws that the government has established long ago to help consumers recover and move forward, these people have been able to put debt behind them.

According to the news article, there were 120,623 bankruptcy filings in June, which were down from 122,775 in May. That's about a 6 percent drop from month to month. But for the year, there will likely still be more than 1.5 million bankruptcy filings by consumers nationwide.

Experts believe that a drop in numbers doesn't mean the economy is healthy or that consumers are better off than they were in 2010. Rather, access to credit has improved and people can rely on credit cards and other loans to get them through a rough period.

"There is a lot of mythology about what drives bankruptcy rates," said Robert M. Lawless, a professor at the University of Illinois College of Law who specializes in bankruptcy. "But consumer credit appears to be the most significant indicator."

Lawless predicts there to be about 1.46 million bankruptcy filings this year. That compares with about 1.56 million in 2010 and 1.45 in 2009. Filings surpassed 2 million in 2005, when many people rushed to file before a new law went into effect that made it more difficult, and more expensive, to file for bankruptcy. But the numbers still remain very high.

This year, 70 percent of consumer filings were Chapter 7, which allows people a fresh start by eliminating debt.

About 27 percent of filings were Chapter 13, which allows people to keep large assets, such as cars and a home, and set up a payment plan over three to five years to make payments.

Chicago Bankruptcy Lawyers are prepared to handle either type of case or explore other debt solutions for our clients. But consumers must take the first step and set up an appointment. A free consultation is needed in order to assess the consumer's financial well-being, outstanding debts, earning potential and overall situation.

Continue reading "Bankruptcy Filings Are Down, but Chicagoans Seeking Help in Record Numbers" »

The Illinois Attorney General recently expanded its probe of alleged "robosigning" of mortgage foreclosure documents, announcing subpoenas to two Florida-based mortgage servicing support providers, the Chicago Tribune reports.

This is welcome news for many of the thousands of homeowners who are dealing with foreclosure in Illinois. Chicago Foreclosure Defense Lawyers have years of experience helping people avoid foreclosure through bankruptcy. Many homeowners want to save their house from foreclosure, but think the only way to do so is to fight their foreclosure in the state court. Not true. Filing for Chapter 13 bankruptcy in Chicago immediately stops foreclosure and makes creditors disappear.

"Robo-signing" has become a national phenomenon where companies hired by banks and lending institutions sign documents without even checking them for accuracy and sign the names of bank officials who never saw the documents. In many cases, these documents include incorrect numbers regarding how much a person owes on their house or how much they have paid. In some cases, the bank may not even have the right to pursue the foreclosure action.

The Illinois Attorney General has asked two of these companies that weren't already under investigation for every affidavit used in an Illinois foreclosure or bankruptcy case since Jan. 1, 2007 and the names of all employees who signed affidavits since then, according to the Tribune. The companies have until mid-June to respond.

All 50 states have been investigating financial institutions and mortgage servicers alike, with differing levels of intensity and aggressiveness. According to RealtyTrac, an online foreclosure marketing company, there were 5,241 new foreclosures in April in Cook County alone and more than 10,000 statewide.

This shows that many people are falling behind on payments because of the lag in the economy and banks are sweeping in and trying to take away people's houses. The biggest causes of debt are unexpected medical bills, job loss and predatory credit card companies that charge ridiculous interest rates and fees.

But while the situation seems bleak, there are ways to protect your home from foreclosure. Filing Chapter 13 bankruptcy will immediately stop the foreclosure process, no matter how long the house has been in foreclosure. It will also stop creditors from calling and bugging you, your friends and family and company.

What this area of law does is it allows consumers to recover from debt by creating a payment plan so they can keep large assets, such as a house and vehicles. Bankruptcy is one area of law where the government has decided to help consumers.

Bankruptcy is especially necessary in the current economy and recovery from the Great Recession, when many people have fallen into a position where they may no longer be able to make house payments or meet other obligations.

Chicago Foreclosure Defense Lawyers have been able to help many people recover from financial despair through bankruptcy and other means. If you, a friend or family member is struggling to get by and needs help, take our free debt analysis today.

Continue reading "Illinois Attorney General Goes After Robo Signers in Chicago Foreclosures" »

The New York Times reports that as the Great Recession ravaged the country's housing market, the percentage of homeowners dropped sharply from 69.2 percent in 2004 to 66.4 percent now. Experts say the levels are akin to where they were in 1998 and could decline to levels seen in the 1980s or earlier.

What this tells Chicago Bankruptcy Attorneys is that while millions of people have used bankruptcy laws to their advantage, there are millions still who have not -- despite faced with losing their homes. Home prices dropped again recently -- 4.2 percent in the first quarter, according to the S&P/Case-Shiller National Index -- illustrating that the housing market woes may continue for some time.

Housing is locked into a downward spiral, analysts say, because people are unemployed, in foreclosure or trapped in homes that are worth less than the mortgage. But another factor is that the disappointment in the housing market collapse has caused many people not to want to own. Still, with it being the cornerstone of the American Dream, real estate experts believe that people will soon go back to the mentality of wanting their own house.

There are many people throughout Chicago who fall into one of the categories outlined in The New York Times. Many people are trapped upside down in their mortgages and are struggling to find a way out. Many hope their loans can be modified to reflect the current value of their property, but their bank is unwilling to help.

Many people are stuck in a frustrating position because of the housing market collapse. But, while they may have just started missing payments on their house or because of unemployment are months behind, Chapter 13 bankruptcy in Chicago may be the right choice.

According to March statistics by the United States Bankruptcy Court, nationwide Chapter 13 filings rose 5 percent to 438,788 from the 415,966 bankruptcies filed in the 12-month period ending March 31, 2010. The number of Chapter 13 filings came in second only to Chapter 7 filings.

Chapter 13 bankruptcy allows homeowners to potentially keep their homes and other large assets, by working out a payment plan over a 3- to 5-year window to satisfy their debts. Filing for Chapter 13 bankruptcy automatically halts any foreclosure process that a homeowner may be going through, so it gives instant protection. And throughout the bankruptcy process, homeowners are able to stay in their houses.

Many people still think that bankruptcy is embarrassing and hurts a person's reputation. Consider this: Donald Trump has filed for bankruptcy four times! Many people use the bankruptcy laws to their advantage because it's one set of laws that are designed with the everyday person in mind. They are designed to allow people a second chance and the opportunity to get their finances in order.

Continue reading "American Dream of Home Ownership a Challenge in Chicago" »