Chicago Bankruptcy Lawyer Blog

There's a new plan to help restructure the mortgages of underwater borrowers. The only catch? It won't work for everyone, say Chicago bankruptcy attorneys.

So far, more than 20 lenders have jumped on board the FHA-backed Short Refi program, which aims to help homeowners by getting lenders to write off 10 percent or more of their principal balance. Borrowers are considered eligible if they are regularly making mortgage payments and do not yet hold an FHA loan. Sounds good, right? Here's where it gets sticky. See, Fannie Mae and Freddie Mac loans don't qualify.

Continue reading "How Bankruptcy Can Pick Up Where New Loan Modification Program Leaves Off" »

Thinking about getting a little help from Uncle Sam for that mortgage or refinance? It might cost more than you think, say Chicago bankruptcy attorneys.

This month the Federal Housing Administration announced it will raise premiums for its popular government loans by a quarter of a percentage point. It's a tiny increase, for sure, but for folks toeing the line between being able or unable to afford a loan, it could have big consequences.

Continue reading "Chicago Borrowers To Pay Higher Premiums For FHA Loans" »

It looks like troubled homeowners may soon have a better option for modifying home loans, according to Chicago bankruptcy attorneys.

A new bill backed by Sen. Sheldon Whitehouse suggests that the federal government consider allowing bankruptcy to be used to modify the mortgages of the millions of Americans at risk for foreclosure. Currently, the best aid Uncle Sam has mustered is the failing Home Affordable Modification Plan, which has barely assisted 500,000 of the four million homes it set out to save. Clearly, homeowners need a better solution.

Continue reading "Could Bankruptcy Help Struggling Homeowners Avoid Foreclosure?" »

If you're like most folks, you like to dream of all the things you could afford if you finally got that pay raise. But what if I told you that you've already gotten your raise - and you're blowing it?

Thanks to a tax bill signed by President Obama in December, the majority of Americans will pony up just 4.2 percent of our paychecks for Social Security instead of the typical 6.2 percent. In other words, most of us will get a paycheck boost of $1,000 on average this year. But since that amount is spread over a year's worth of paychecks, it will likely go unnoticed by many wage earners - and therefore won't be used as efficiently as it could be, say Chicago bankruptcy attorneys.

Continue reading "How Maximizing Tax Cut Can Help Taxpayers Lower Debt" »

What exactly does Christmas shopping have to do with energy efficiency? A lot, if you want to get a soon-to-expire discount on new appliances.

For the past two years, homeowners have been eligible for an energy tax credit of up to 30 percent, or $1,500, on products from biomass stoves to storm windows to gas-burning fireplaces. With most Americans still short on cash, it's been a great way to save money when upgrading old appliances, say Chicago bankruptcy attorneys. But all that's coming to an end on Dec 31. In order to take advantage of the discount, you need to have the energy-saving device installed and ready to use by that date.

Continue reading "How Chicago Shoppers Can Save Money on New Appliances This Month " »

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

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

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

If you can't beat 'em, join 'em - at least, that's what big banks are doing.

After their effort to stop the financial reform bill failed with the overhaul's passage Thursday, banks have no choice but to play along - but they're playing on their own terms, according to Chicago bankruptcy laywers. That's bad news for the many folks struggling with large debts.

For instance, new debit rules in the legislation decrease the interchange fee - the amount that retailers must pay to banks for debit card transactions. So while more retailers might start accepting debit - a benefit for consumers who want more payment options - banks plan to make us pay elsewhere.

Continue reading "Banks Are Back to Old Tricks and New Fees after Financial Reform Bill Passes" »

It looks like the financial reform bill will pass - though just barely. But what does it mean for you - and specifically, for that debt you're carrying around?

If all goes according to plan, the overhaul will do more than aim to avert another financial crisis, say Chicago bankruptcy attorneys. It will alter the way we use our credit and debit cards and qualify for a home loan. What it won't do, however, is automatically solve all our debt problems. That's still up to us.

Continue reading "Pros and Cons of Financial Overhaul Bill for Chicago Consumers" »

Uncle Sam is really laying into credit card companies lately - and I'm not complaining.

On Tuesday, just months after the latest Credit CARD Act rules went into effect, the Federal Reserve adopted a new set of credit card laws. This time, they're limiting late fees to $25 (instead of the $30-plus penalties many of us are accustomed to paying) and banning banks from charging a fee higher than the violation with which it's associated. They'll also put a stop to inactivity fees - in other words, charges for not spending money with your card - and multiple fees for the same violation.

But here's what the new credit card rules - which go into effect this August - won't do.

Continue reading "Chicago Credit Card Holders Can Benefit From New Late Fee Rules" »

For Chicago shoppers looking to save a buck, the finance bill passed by the Senate this week offers some pretty intriguing speculation.

Free credit scores, the elimination of mortgage prepayment penalties, and a consumer financial protection agency are just some of the possibilities.

Here's a brief rundown of the potential ways the new finance bill could help you save money. But since we won't know for sure until the bill is finalized sometime in the future, remember that it really is just that: speculation. If you want to increase your income and get rid of debt, you don't have to wait for Uncle Sam - you need to take action today.

Continue reading "Finance Bill Could Offer Opportunities for Chicago Consumers to Save" »

There's a reason you might want to fill out your 2010 Census carefully and soon. And it's not just because doing so can help your community get more federal funding, according to Chicago bankruptcy lawyers.

Dragging your feet increases the chances that a census worker will call to check up on you. That in itself isn't the problem - scam artists are. See, in the past people have posed as census workers to gather sensitive personal information, like social security, bank account and credit card numbers. By putting off the census - or by being careless about who you interact with - you could be increasing your identity theft risk.

Fortunately, it's easy to tell official census workers and materials from the frauds.

Continue reading "Chicago Residents Find Ways to Avoid Identity Theft during the 2010 Census" »

Remember cash for clunkers? Well, how about rebates for refrigerators?

Uncle Sam has $300 million in stimulus money, and he wants you to buy a new fridge - or washer, dryer or HVAC, according to Chicago bankruptcy attorneys. The point, of course, is to encourage consumers to start spending - but also to replace old, outdated appliances with new, energy-efficient ones. Modern washing machines, for instance, use about half the water as their older counterparts. They also squeeze out more water during the spin cycle, meaning you'll need less energy to dry your clothes as well.

If you're in the market for new appliances, this might be the time to do it. However, it's important to weigh the pros and cons of the rebate program - especially if you're already struggling to make ends meet without a new fridge to pay for.

Continue reading "Chicago Bankruptcy Attorneys See Pros and Cons to Cash for Appliances Program" »

The word is out - the $75 billion loan modification program meant to protect homeowners from foreclosure has actually made the situation worse.

Out of the millions of Americans facing foreclosure, Uncle Sam's program modified mortgages for just a few hundred thousand - some of which ended up going into foreclosure anyway. Now critics are saying the program has worsened the crisis by leading us on. Instead of saving money for alternatives to modification or, worst case scenario, for moving to a new residence, many folks kept holding out hope that modification would save them - until it was too late.

Many homeowners simply can't afford to keep their homes - and unless they can get rid of debt or change their lifestyle, a modification that barely lowers their mortgage isn't going to make much difference. Fortunately, that's where Chapter 13 bankruptcy comes in, according to Chicago bankruptcy attorneys.

Continue reading "Chicago Bankruptcy Attorneys Say Government Loan Program Helped Make Foreclosure Crisis Worse" »

Remember that stimulus package the government enacted back in February? Well, apparently Uncle Sam got a little too generous.

It's just been announced that up to 15 million taxpayers could owe some of that stimulus money back next year. Why? Under the Making Work Pay tax credit, most working Americans had less withheld on their paychecks, resulting in extra take-home pay of about $60 a month. But when the government changed its withholding tables for the new system, it didn't factor in things like whether someone was married to a working spouse, held more than one job, was retired with income taxes withheld on their pension or was a college student still being claimed as a dependent on their parents' taxes.

So let's say you have two jobs, each one earning at least $20,000. That means you could have been credited twice - and will owe half of that money back to the government on your income taxes. If you're owed a tax refund, that refund will simply be reduced. But if you owe taxes, you'll also have to pay all that stimulus money back to Uncle Sam come April. Fortunately, there's a way to help ease the pain of such nasty surprises.

Continue reading "Some Employees May Have to Pay Stimulus Money Back" »

The economy might be recovering, but we're not out of the woods yet - especially when it comes to foreclosures.

Even though a $75 billion government anti-foreclosure program recently reached its goal of helping 500,000 folks get loan modifications, that's only one-eighth of the 4 million homeowners it originally set out to assist. And while some banks have helped more than one-third of eligible homeowners with the program, others like Wells Fargo and Bank of America have helped just 20 and 11 percent, respectively.

Now consider that millions more are facing foreclosure but ineligible for loan modification. Still, as many as half of those who receive a modification end up defaulting anyway. It's depressing stuff. But luckily, there's another government program that can save your house. It's been around for years, has been proven to work again and again and doesn't require your lender's approval - it's bankruptcy.

Continue reading "Loan Modification Program Hits Target, But Is It Enough?" »