Chicago Bankruptcy Lawyer Blog

Up until now, banks have been the bad guy in the mortgage crisis. But it seems like America's most hated corporations are finally trying to redeem themselves.

Banks are working to offer better loan modification programs to troubled borrowers, according to a recent article in Newsweek. And the timing couldn't be better, with recent reports that half of homeowners in the government's Making Home Affordable program ended up throwing in the towel. Unfortunately, banks won't be able to help every one of the millions of homeowners at risk of foreclosure.

Continue reading "Bank Programs Offer More Flexible Loan Modifications Than Making Home Affordable" »

If you've used the last couple years to turn your financial lemons into lemonade, you're not alone.

Despite hard economic times, Americans have managed to decrease credit card debt to the lowest level in 8 years and more than 13% less than just a year ago. Not only that, but more folks are making their payments on time. For some of us, its solid proof that all that scrimping and saving and budgeting can really pay off, say Chicago bankruptcy attorneys. For others, though, it might be a nice symptom of a not-so-nice cause.

Continue reading "Chicago Homeowners Lower Debt But Struggle to Pay Mortgage" »

The latest foreclosure statistics are in, and things are looking up - sort of.

The good news is that slightly less homeowners are underwater, a term used to describe when your home is worth less than what you owe on your mortgage. The amount of U.S. homeowners with negative equity fell from 23 percent to 21 percent this spring, according to a report by Zillow.com. Though it looks like a small change, it means we could see fewer foreclosures in the future, say Chicago bankruptcy attorneys.

Still, any amount of foreclosures is too many - and with more than one of every 1,000 homes being seized in the month of June, many at risk homeowners need financial help.

Continue reading "Chapter 13 Bankruptcy Is an Effective Method for Chicago Homeowners Hoping to Stop Foreclosure" »

Is too much debt making it difficult to afford your rent? Or maybe you're looking for a bigger place - but without the bigger price? You may still be able to take advantage of the current renter's market before it disappears.

Recently, renters have gained major negotiating power, say Chicago bankruptcy attorneys. Younger people are increasingly opting - or forced - to rent instead of buy. Kids who moved back in with their parents and renters who added roommates to help cover their lease are finally looking to move back out on their own. Eventually, we could end up with a rental shortage. But in the near future, a lot of vacant apartments and potential tenants might mean a chance for you to lower your rent.

Continue reading "Negotiate a Lower Rent and Save Up for Buying a House" »

No news is good news - especially when it comes to the recent rate of foreclosures.

After a sharp rise in foreclosures during the recession, the number of folks facing home loss remains unchanged from last year. Furthermore, one-third fewer homeowners are receiving those dreaded foreclosure warnings, according to the Associated Press.

But don't breathe a sigh of relief just yet - especially if you're dealing with too much credit card debt or other financial strains that affect your ability to pay the mortgage.

Continue reading "Foreclosures Stop Increasing, But Some Chicago Homeowners Still At Risk" »

There's hope for Chicago homeowners who owe more on their mortgage than their house is worth.

On Tuesday it was announced that home prices increased for the first time in nearly four years this February, according to The Standard & Poor's/Case-Shiller price index. Increasing values mean that homeowners can finally start rebuilding equity - that's the good news. The bad news is that housing prices aren't predictable, and they probably won't rise as rapidly as they once did. But who wants another bubble anyway, right?

Besides, whatever happens in the future, you're in luck just by being a homeowner - and here's why.

Continue reading "Increasing House Prices Mean Hope for Underwater Chicago Homeowners" »

A tax credit is a nice incentive if you've been thinking about buying a house. But a tax credit alone doesn't mean you're ready, caution Chicago bankruptcy attorneys.

Many first-time buyers have been rushing to take advantage of a credit of up to $8,000 (or $6,500 for existing homeowners who have lived in their current house for five or more years) since, in order to qualify, buyers must sign a contract by the end of April - this month.

But don't worry if you don't make the deadline - and don't rush if you're not ready. Unlike first-time homebuyers were mistakenly led to believe last decade, home buying isn't a walk in the park. Taking the time to have your financial ducks in a row first goes a long way towards ensuring a smooth buying process. In fact, in the long run it may save you more money - and heartache - than any homebuyer tax credit.

Continue reading "Chicago Homebuyers Should Get Finances In Order Before House Shopping" »

The good news: almost a quarter of a million homes have received lower mortgage payments since the inception of Obama's foreclosure relief program last year.

The bad news: not all of the modifications will last.

A rising number of homeowners are defaulting despite receiving cheaper mortgages. Defaults almost doubled last month alone, according to the New York Times.

Sure, everyone can benefit from a lower house payment. But often times a lower payment alone is not enough to solve our financial problems. What we need is a plan that addresses the root of our inability to pay the bills - for many of us that means eliminating credit card debt.

Continue reading "Bankruptcy Might Offer a Better Way for Chicago Homeowners to Stop Foreclosure" »

Maybe you can't lower your mortgage - but what about your property taxes?

As much as 60 percent of homeowners are paying thousands more in property taxes than they need to, according to Msnbc.com. Why? Their property taxes are being assessed based on the value of their home before the housing bubble burst.

Property taxes are typically reassessed every 3-5 years. If 2007 was the peak of the market, that means you might still have a couple years to go - and counties are dragging their feet on the reassessment process because, let's face it, they could use the extra money.

But you don't have to wait for the county. You might be able to lower your taxes - and thus increase your income - with an appeal.

Continue reading "Chicago Homeowners Might Be Able to Lower Property Taxes with Assessment Appeal " »

A mortgage payment is the biggest bill most Chicago residents pay each month. So with mortgage rates at the lowest they may ever get - around 5 percent - now might seem like a good time to bullet and pay off your home loan early, if you can afford it.

But for most of us, just the opposite is true.

A low rate is actually a bad time to pay down a loan - especially if we're carrying debt or have neglected to start an emergency savings fund. We'd be better off paying down our credit card debt, and here's why.

Continue reading "Bankruptcy Might Yield Better Savings Than Paying Down the Mortgage for Chicago Residents " »

Who wouldn't want to get a $6,500 tax credit this year? Apparently the many folks who can't afford to buy another house, say Chicago bankruptcy attorneys.

In November, the federal government updated its homebuyer tax credit - which was originally meant to help renters buy their first home - to include current homeowners as well. The idea was to encourage homeowners to upgrade to a new house, hopefully stabilizing prices and boosting the sluggish real estate market in the process.

But homeowners aren't biting - mostly because they can't afford to. With unemployment up, home values down and foreclosure looming, homeowners might find better benefits from another strategy: Chapter 13 bankruptcy.

Continue reading "Chicago Homeowners Find an Alternative to Foreclosure With Chapter 13" »

Somehow our priorities got switched around during the Great Recession. Homeowners who used to prioritize paying their mortgage above all else are now opting to use that money to pay their credit card bills, Chicago bankruptcy attorneys say.

In a way, it's a strategy that makes sense. One-quarter of American homeowners are underwater - meaning they owe more on their house than it's now worth. Consequently, they're wary of putting money into a home with no equity because doing so feels futile. Credit cards, on the other hand, seem to pay off. We can use plastic to buy necessities like groceries, gas, and clothes. And for those of us who have lost our paycheck or just aren't bringing home enough money, credit cards enable us to cover what we can't afford with cash (while our debt grow in the meantime).

But just because one solution seems easiest doesn't mean it's the smartest - or that there isn't a better strategy out there. There are consequences whether you choose to default on your mortgage or your credit.

Continue reading "Chicago Bankruptcy Attorneys See More Americans Paying Credit Cards Instead of Mortgage" »

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" »

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" »

Citibank is giving some 4,000 homeowners a very happy holiday.

The banking giant is suspending foreclosures and evictions for people with Citi-owned loans through mid-January. A company spokesman said the aim is to reduce stress during a notoriously hectic time of year, according to MSNBC.com. In the meantime, the bank says it's at work on alternatives to foreclosure.

Unfortunately, helping potentially 4,000 families means only helping a miniscule percent of the millions of Americans that could lose their homes in coming months. For the lucky few, it will certainly provide relief (albeit temporarily), but the rest of us are going to have to take matters into our own hands if we want a home after the holidays.

Continue reading "Some Home Foreclosures on Hold for the Holidays" »