Chicago Bankruptcy Lawyer Blog

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" »

Some rules were made to be broken - and paying off your debt is no exception, say Chicago bankruptcy attorneys.

Common wisdom has always held that it's best to pay off the debt with the highest interest rate first - and for good reason. This way, you'll save the most money because you'll be avoiding the biggest future payments, and you'll keep your most expensive debt burden from growing.

But there's a downside to this strategy. As you know, the key to lowering debt is to pay more than the minimum balance, since small minimums like 2-4% might not cover much more than interest. And if you're only paying interest, the principal - the actual amount for the items you purchased - will stay the same, meaning you'll have to keep making those interest payments indefinitely. Problem is, people often get discouraged if they find it difficult to pay enough to cover a high interest rate plus some of their principal. And they use this as an excuse to quit.

Continue reading "Chicago Bankruptcy Attorneys Say Paying Off Any Debt Is Better Than Doing Nothing" »

Using cash usually makes more sense than credit. You don't have to deal with interest, you know you can't spend more than what's in your account and the act of physically parting with your money makes you less likely to splurge -- and wind up in debt.

But there's at least one pitfall to paying with paper - ATM fees. Let's say you need to take out some money and you aren't anywhere near your bank. Instead, you go to the nearest ATM. You can expect a fee of at least $3 for using an ATM other than your bank's. And that's not all. Your bank thinks it has to punish you for withdrawing money elsewhere, so you can also expect to get dinged up to $2 on the other side. If you're taking out $20, you've already spent a quarter of your money before you even break the bill.

Fortunately, the situation can be pretty easily avoided.

Continue reading "Watch Out for ATM Fees That Add Up" »

When you have a headache, you take Tylenol. When you're cold, you throw on a jacket. When faced with common problems, most folks opt for the most obvious solutions. Except when it comes to getting out of debt.

For some reason, the vast majority of Americans will let themselves suffer for years before they consider one of the most effective, logical solutions to financial troubles - if they consider it at all. I'm talking about bankruptcy.

Many people think of bankruptcy as a last resort - something they'll do when they hit rock bottom. But why let yourself continue on a downward spiral when you could start your journey towards a brighter future right now?

Continue reading "Is Bankruptcy Your Best Debt Solution?" »

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

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

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

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

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

When I was a kid, I based a lot of decisions on what my friends thought was cool. If they were on the softball team, I wanted to be on the softball team. If they were dying their hair pink and wearing pleather pants, I became an unfortunate victim of fashion right alongside them. My mom's catchphrase from my childhood was: "If everybody else jumped off a bridge, would you?"

Luckily, it didn't take me long to realize it's a lot more fulfilling to march to the beat of your own drummer. And I thought that's exactly what I was doing as an adult until I realized I was still a follower in one important arena of my life - my money habits.

Several years ago, I had a lot of credit cards. And I used them for almost every purchase. Seriously - other than birthday money from my parents, I survived on plastic and plastic alone. And, as you can imagine, I racked up quite a lot of debt. I'd like to think that it was because I didn't know any better. Or because, poor college student me, I couldn't afford to live on cash. But that's not true. Though I was definitely in denial, I knew what I was doing. Because whenever I used credit to spend beyond my means, I'd get a sinking feeling, and questions would start popping up in my head, like: Is my debt going to keep growing? How will I pay it all off? Will I ever be able to afford a house - or be able to retire?

Continue reading "Don't Follow the Crowd When It Comes to Your Finances" »

There's a new law to protect consumers on the horizon - and credit card companies aren't exactly taking it sitting down.

In anticipation of next year's Credit Card Accountability Responsibility and Disclosure Act - which aims to end hidden fees and unfair term changes - credit card issuers are looking for last-minute ways to squeeze money out of consumers before their clock runs out. How are they doing it? Well, one method is by switching your card from a fixed rate to a variable rate, according to a recent story.

It might not seem like such a big deal now, since the prime rate (what creditors use as a base to set variable-rate APRs) is about as low as it can get. But that means that it's only going to increase - and that's exactly what credit card companies want to be able to take advantage of. Hey, they might even give you back your fixed rate - once it settles at a much higher rate, of course.

Continue reading "More Credit Card Issuers Are Switching to Variable Rates In Anticipation of New Law" »

Even though it's been a while since the end of summer meant back to school, I still find myself intrigued by the new clothes, backpacks and books on store shelves.

It's not so much the stuff - since I don't have kids yet, I'm not planning a back-to-school shopping spree - but the feeling I get when summer winds down and fall is just around the bend. It makes me feel like finally getting organized - like this is my chance to start fresh.

And with the economy struggling to recovery, this year might be the perfect time to reflect and reorganize. For instance, have you been putting off starting a budget? Maybe this is the time to do it. Consider taking a look at your expenditures so far this year and brainstorm ways to cut back if necessary. Maybe devise some new saving methods. For instance, I'm still having luck with the $5 bill plan. Every time I get a five back with my change, I keep it. When it reaches $30 or so, I deposit it into my savings account. Not only am I spending less, but there's less incentive to use a credit card because no cash means no change.

Continue reading "Chicago Community Workshops Are One More Way to Learn About Finances" »

It's a catch-22. We're supposed to make it through tough economic times by saving - but then we get blamed for slowing down the economy.

What do I mean? In June, consumers reduced their credit card debt for the fifth month in a row, according to a Federal Reserve report. Total consumer debt in the U.S. dropped by nearly 5 percent. But instead of focusing on the good news, the media is speculating about how Americans are hurting their chances for recovery by not providing enough stimulus.

It's not like I was expecting a pat on the back or anything, but sheesh - a little understanding might be nice.

Continue reading "Paying Down Debt Should Take Priority Over Spending to Stimulate Economy" »

Something rare happened to me recently - I actually heard some positive economic news. In this day and age, that's reason for some (cautious) celebration.

So here's the happy newsflash. Proof has finally arrived that the $787 billion economic stimulus package passed in February was (no surprise) worth the money, according to a New York Times editorial. Last week, second-quarter economic performance results were released and, at long last, the economy seems to be shrinking at a slower rate. We're losing 1 percent a year instead of the more than 6 percent loss we experienced in the first quarter.

OK, so we're still at negative economic activity, but it's a lot closer to becoming positive. And there's another good sign: the majority of the stimulus money hasn't even been spent yet. That's due to happen between now and September.

But the outlook isn't all roses (you knew there had to be a catch, right?).

Continue reading "Illinois Bankruptcy Lawyers See Economic Growth, But Warn Road to Recovery Might Be Long " »

On Tuesday, the federal government made a deal with mortgage company execs to perform 500,000 loan modifications by Nov. 1 - a significant scale back from than the 3-4 million first expected to be helped by the Making Home Affordable program. While Uncle Sam struggles to revive its ailing loan modification incentive program, some homeowners fed up with waiting are opting for what they figure is the easy way out - they stop making mortgage payments and surrender their home to the bank.

But foreclosure isn't free.

When you give up your home, you lose more than the roof over your head - you lose your credit and any equity in your house. And just because you aren't paying the mortgage doesn't mean your financial obligations are over. In some cases, you can be held responsible for the remaining balance once your loan servicer sells your house, meaning you lose future as well as current financial independence - especially if you're already in debt.

Continue reading "Chicago Bankruptcy Lawyers Explain There's No Such Thing as a Free Foreclosure" »

Now that the government is offering a financial incentive for lenders to perform loan modifications, you should be less likely to face foreclosure, right?

Don't hold your breath.

Turns out that the $75 billion Making Home Affordable program forgot one important thing - banks are in it for the money. And in this case, the $1,000 the Obama administration is offering for each modification has proven paltry compared to what banks can pull in by keeping you delinquent, according to this New York Times story.

Continue reading "Chicago Bankruptcy Lawyers Explain Why Chapter 13 Can Be More Effective Than Loan Modification " »

You probably already know that if you save your aluminum cans and glass bottles you can earn something like 5 cents per container - but, unless you've taken to collecting cans from friends, neighbors and city streets (not necessarily a bad idea) it's really more of a rebate than a way to make money. But recycling really can pay - you just have to find the right recyclables. Try looking in your attic, closet, desk - even your wallet.

Gift cards
If you have gift cards, use them sooner rather than later - some stores will actually deduct a maintenance fee after a year of non-use. But sometimes the problem is that you don't care much for the store. I once had an REI card ride around in my wallet from one Christmas to the next. I just don't go camping that often - and I'm not really into the suburban hiker look. I wish I had known about CardAvenue.com, a site that allows you to exchange a card for one that better suits your tastes. Would you rather have cash than more plastic? No problem. You can sell your card on eBay, where it could go for 80 to 90 percent of its face value. As for those airline miles or credit card points you never use, consider redeeming them at Points.com.

Continue reading "Chicago Bankruptcy Attorneys Recommend Recycling for Extra Cash" »

Some people have coin collections. Others collect baseball cards. Some folks, like my boyfriend, collect guitars.

I happen to have a credit card collection. Fortunately, I haven't opened any new accounts lately - I know better. But once upon a time, I was clueless. If a store offered a 15 percent discount or members rewards to apply for a card, I signed right up. You probably know what happened next - I spent beyond my means, had too many bills to keep track of and wound up damaging my credit and getting into some serious debt. It's a pretty common tale.

So why do I still have them - cards for Nordstrom, Target, Best Buy and the Gap - when friends in my same situation have since cut up their cards and closed their accounts? Because I've learned that, for me, out of sight is out of mind.

Continue reading "Keep Your Credit Cards Out of Sight to Save Money, Suggest Chicago Bankruptcy Lawyers" »

The recent economic news seems to be straight out of a movie - the good, the bad and the ugly.

This morning, for instance, I read about soaring stocks, falling jobless claims and the Fed's prediction that the economy could start to recover by the end of the year. Ah, things must be getting better, I thought. Finally!

Minutes later, I noticed headlines about growing unemployment - Illinois, for instance, just hit 10.3 percent in June, more than 3 percent higher than June 2008 and larger than the current national average of 9.5 percent. OK, I thought, so maybe things aren't looking up quite yet. Because of this unemployment (which, according to another article, is actually higher than reported because it doesn't take into account furloughs, people who have given up looking for work and lack of raises) the housing market - and thus the economy - seems unlikely to make a comeback anytime soon.

Who do you believe?

Continue reading "Chicago Bankruptcy Attorneys Recommend Taking Action to Stop Debt" »