Chicago Bankruptcy Lawyer Blog

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 Children may become withdrawn, act out in class or at home, or experience depression.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" »

It's a tough time for young adults in this country.

They have dealt with increasing costs for higher education on top of cost-of-living expenses that never go down. They come out of college after earning a degree over four to five years and are thrust into a job market that is the worst in decades.

And so many are becoming adults and starting their lives saddled with debt. Many college students live off credit cards. They get little guidance from their parents or other people of influence who can teach them the dangers of overspending and relying on credit cards, which have high interest rates and hidden fees, especially for people without credit.

One solution to the problem is filing for bankruptcy in Chicago. While bankruptcy can't wipe out college loan debt in most cases, it can eliminate other unsecured debt that is causing students who have only managed to find low-paying jobs to pay the minimum on their cards.

Even if bankruptcy seems like an extreme option, making minimum payments, missing payments and carrying tens of thousands of dollars in debt while fending off creditor calls and wage garnishment threats is no way to live. If you are having debt problems after having just gotten out of college, consult with an experienced Chicago bankruptcy lawyer before making any other decisions.

A recent MSNBC.com article looks at the disparity between young people and older people in America today, concluding that the Great Recession made the gap between old and young much wider than it had been previously.

The recession caused adults older than 65 to enjoy large financial gains, while those under 35 are mired in losses. While it has historically been found that older Americans have more money than younger Americans, the gap has grown in recent years.

Statistical analysis has shown that those 65 or older had a median net worth of $179,494 in 2009, up 42 percent from 1984. In 2009, households headed by those under 35 had a median net worth of just $3,662. That's down 68 percent in the same time period.

The housing market collapse hit younger Americans worse than their older counterparts. Half of people 65 and older who own houses bought them before 1986, which allowed them to ride big gains in home equity during the 1990s. About two out of three have paid off their mortgages.

Younger adults bought into the housing market recently only to see it collapse and then be stuck with high payments on houses that aren't worth what they're paying. Either that or they walked away and took hits on their credit history. They also have little equity in their houses.

The poor job market has also hit younger people hard. Workers under 35 are finding a difficult time finding a job, while older workers have been in the workforce for a long time and are holding on to steady jobs.

Continue reading "Young Adults Hit With Debt in Chicago Harder Compared to Older People" »

Recently released data suggests that more than 120,000 jobs were added in November, which lowered the unemployment rate to 8.6 percent, CNNMoney reports.

This is certainly encouraging news. Our Chicago bankruptcy lawyers hope that many of the seasonal workers who were hired in retail and by companies producing consumer goods can hang on to those jobs as we get into 2012.

But for many others, jobs have been scarce. Many people have spent months or even years attempting to get a steady income. For millions of Americans, unemployment benefits have been what they live on. But whether a person is newly employed or still struggling to find work, it's likely that credit has been a crutch that is close to breaking.

Without steady income, people have relied on loans and credit cards to get by. This is a disaster waiting to happen. If the consumer has no income, they are likely getting bombarded with calls, e-mails and letters harassing them and making threats against them. If people happen to have a job, they may be in the process of having their wages garnished.

One initial benefit of filing for bankruptcy is that it stops creditors from hounding consumers. Once the paperwork is filed, creditors are no longer allowed to directly contact the borrower as all their communication goes through the court. That can be a load off their shoulders at a difficult time.

The obvious long-term benefit of bankruptcy is the ability to shed debt that has made life extremely difficult. In many cases, all the debt can be vanquished without a person losing their assets. In some cases, they may have to sell some things to pay off their debt and if they file Chapter 13 bankruptcy in Chicago, they can set up a payment plan to pay off debt.

Back to the employment numbers.

The CNNMoney story reports that experts had predicted about 110,000 jobs would be added, so the new numbers surpassed their predictions. Government jobs actually decreased by about 20,000, though private sector jobs were bumped up by about 140,000.

The majority of jobs were added in retail -- 50,000 ---and hospitality, such as hotels and restaurants -- 20,000. An interesting point to the story is that the Labor Department's numbers are adjusted to take into consideration seasonal trends, so the holiday hiring season isn't all to credit for the job growth.

Still, there are 13.3 million people out of work and 43 percent of those people haven't had a job in six months or more. Less than 1/3 of the 8.8 million jobs that have been lost in recent years still haven't been recovered.

Let's hope our country's economy keeps this momentum going into the new year and stock prices, real estate prices and numbers of hires continue to increase. This is a critical time for our nation and our Chicago bankruptcy lawyers hope the recovery continues.

Continue reading "Jobs Up, Unemployment Down, But Chicago Bankruptcy Still a Viable Option " »

More than two months after Americans got a small paycheck boost courtesy of Uncle Sam, the verdict is in: it's not working.

The goal of rolling back Social Security payroll taxes by 2 percent was to encourage consumers to spend more, thus stimulating the economy. But with the cost of living rising faster than expected and people preparing to pay income taxes, folks are actually spending less, say Chicago bankruptcy attorneys.

Continue reading "Rising Costs of Food and Gas Affecting Payroll Tax Cut" »

Chances are there's a surprise from your employer on its way to your mailbox, and it's not a Christmas card.

As they seem to do every year, health care premiums are going up in January, note Chicago bankruptcy attorneys. And employers are passing those costs on to us. Sometimes insurers will include a vague reference to costs associated with the federal healthcare reform as explanation for the hike, and sometimes they'll provide no reason at all. But while insurance companies can play it off like no big deal, a 20 percent increase in monthly payments presents a real problem for Americans hoping to get their spending on track for 2011.

Continue reading "Employer Health Insurance Premiums Rise for Chicago Workers" »

It looks like American workers could be getting a raise next year, albeit a small one.

If the tax agreement between President Obama and legislators passes, one of the provisions will reduce the Social Security payroll tax rate from 6.2 percent to 4.2 percent. For someone making $60,000 a year, that's an extra $1,200 in annual take home pay - or the equivalent of another $25 a week. It might not seem like much, but if you're looking for ways to make ends meet, any little bit can help, say Chicago bankruptcy attorneys.

Continue reading "How Bush Tax Cut Extension Could Affect Chicago Workers With Debts" »

Move over Black Friday. Small Business Saturday is here. And the timing couldn't be better.

American Express is hoping to encourage shoppers to spend locally this season, starting today. In fact, the credit issuer is offering $25 in spending credit to the first 200,000 people who register American Express cards today on the Small Business Saturday website, according to Chicago bankruptcy attorneys. But before you write the whole thing off as an expensive marketing campaign, think about this - it makes financial sense.

Continue reading "Small Business Saturday's Strategy Is Good for the Economy and Chicago Shoppers" »

It's all over, folks. At least, that's what the National Bureau of Economic Research has to say about the Great Recession.

But for many of us, it's not so clear-cut. Whether we really are on our way out of the latest recession as some experts speculate, or headed into a so-called double-dip recession as others suggest, doesn't really matter, say Chicago bankruptcy lawyers. What does matter is what's going on with our own finances.

Continue reading "Recession Still Being Felt by Chicago Residents Dealing With Debt" »

If you're going to go through an economic downturn, it looks like you're better off doing it as a woman.

For years, women have earned less than men for doing the same work - the infamous wage gap. Now it appears that young, single females are actually pulling in bigger paychecks than their male counterparts. On average, women between the ages of 22 and 30 are earning 8 percent more than men, according to data by Reach Advisors. And with many women looking for extra money to pay down debt, the timing couldn't be better, say Chicago bankruptcy attorneys.

Continue reading "Young Chicago Women Earning More at Work Than Men" »

As if it isn't hard enough on our finances to be headed for a possible double-dip recession, now we have to watch out for new recession-related scams, too.

The longer our economy is stalled, the more likely we are to face financial difficulties - from unemployment to foreclosure to inability to pay the bills. Unfortunately, scammers are acutely aware of this, say Chicago bankruptcy attorneys. And they're increasingly preying on our desperation for a quick fix to our money woes.

But there's good news. It's possible to identify nearly any scam , once you realize what most frauds have in common.

Continue reading "How Chicago Consumers Can Watch Out for Recession Related Scams " »

Most of us consider the recession a bad thing, and for many good reasons. But for Chicago workers lucky enough to still be employed, today's economy might actually have some benefits, too.

According to the New York Times, wages are on the rise, inflation is on the decline and the rate of layoffs is stabilizing. So what does it all mean? If you can manage your money and keep your job, you just might make it out of the recession in better shape than you entered it.

Continue reading "How the Great Recession May Have Benefits for Chicago Workers" »

Living in fear is no way to spend your life, but living in denial can be just as bad. Yet that's what millions of Americans are doing in today's unstable job market.

Despite the fact that one out of every 10 workers is unemployed and 55 percent of Americans fear they could soon lose their job, we're doing almost nothing to prepare for a possible layoff, according to MSNBC.com. Almost half of workers say they don't have enough money to pay the bills for just one month without a paycheck.

No one likes to think about the worst case scenario. But facing your fears and preparing for the worst today can ease your pain - and pad your wallet - just in case your luck runs out tomorrow.

Continue reading "Saving Money Today Can Help Chicago Workers Deal With Unemployment Tomorrow" »

When you're out of work and without a paycheck, finding a new job can feel like it's taking forever - especially when you're also struggling to pay your credit card bills and the mortgage. But all that legwork can pay off in more ways than one.

Of course, the best case scenario is that you find a well-paying job quickly. But even if you don't, you can get a financial break in the meantime by deducting money you spent on your job search, say Chicago bankruptcy attorneys.

Despite the debate over if or when the economy will recover, millions of Americans remain jobless. Those who have been out of work for six months or more were recently cut off from jobless benefits for seven weeks during a congressional standoff that ended last week. But what didn't get cut off is a series of tax deductions for job searches.

Continue reading "Tax Breaks Help Unemployed Chicago Workers Pay for Job Search" »

One day we're discussing the end of the economic downturn - the next, we're speculating about whether we're in a double-dip recession.

What's the moral of the story? You just can't trust the economy - so you've got to trust yourself.

Sure, things seem bad right now. But if you look at the past, you'll see that economic history is punctuated by a series of ups and downs. Some say we're experiencing a double-dip now, others say we're not. The truth is, it doesn't matter, say Chicago bankruptcy attorneys. What matters is the state of our finances. Because if they're prepared to weather any economic storm, we'll be prepared as well. And if the storm never comes? Look at is as free financial insurance.

Continue reading "Chicago Residents Prepare Finances for a Possible Double-Dip Recession" »

Think debt is just a drain on your finances? Think again. Carrying too much debt can actually be detrimental to your entire life, from your income to your health.

Let's say you're looking for a job, whether it's because you're unemployed, a new college graduate or interested in changing careers. You know you're qualified, you write up a great resume and you ace the interview - but you don't get the position. What gives? Maybe your credit.

Employers can often request a copy of your credit report. And if they see a load of debt and a record of late payments- fair or not - it's not going to reflect well on your character. But here's the good news. Not only can you fix the situation by fixing your credit, but the process of making an effort will often prove to potential employers that you have what it takes for that job.

Continue reading "Too Much Debt Can Keep Chicago Job Seekers Unemployed" »