Chicago Bankruptcy Lawyer Blog

Banks are finally starting to see the light about the mortgage crisis. But is it too late?

Banks are starting to improve programs aimed at helping homeowners avoid foreclosure, according to Newsweek. Amid news that half the participants in President Obama's Making Home Affordable Program have dropped out because it wasn't working, banks' timing couldn't be better. The only problem is that, with up to 5 million people in danger of losing their homes - and millions more already foreclosed upon - the new effort might not be enough. Fortunately, there's an alternative.

Continue reading "Banks Finally Start Helping Chicago Borrowers with Mortgages" »

When it comes to consumer spending, our country suffers from short-term memory loss.

Sure, the recession has most of us balancing a budget, pinching pennies and generally thinking more about how we spend our hard-earned dollars. But when the economy picks up, many folks will go back to our old, sometimes irresponsible ways. Case in point: buying new cars.

Back a few years ago, it seemed that everyone had to have a brand new vehicle. It was a status symbol. If we couldn't afford to buy a car, we leased one. But not surprisingly, those new cars proved to be bad investments when the economy took a nosedive.

Continue reading "Used Cars Get the Job Done Without the Debt and Depreciation" »

Sometimes the most important thing we learn about in college isn't in our textbooks: debt.

With college tuitions at an all-time high, more students than ever are taking out loans - and now, they're defaulting in record rates. Over 30 percent of community college students defaulted on loans, according to The Chronicle of Higher Education. That number climbs to 40 percent for loans made to students at for-profit universities.

It's hard to make ends meet when you're going to school and working - heck, even when you're finished with school and working. But having thousands of dollars in unpaid student loans can haunt your finances well into the future, say Chicago bankruptcy attorneys. And while discharging student loan debt isn't as simple as it used to be, there are options available.

Continue reading "Record Number of Chicago College Students Default on Student Loans" »

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" »

Worried you have a bad credit score? You're definitely not alone.

More than a quarter of Americans now have a credit score of 599 or less, which categorizes them as a poor risk to lenders - that's 2.4 million more people than before the Great Recession, according to a recent report by FICO, Inc. That means more folks than ever will have trouble securing car loans, getting a good mortgage rate and qualifying for new credit cards.

But there's hope.

Continue reading "Bankruptcy Can Help Improve Decreasing Chicago Credit Scores " »

As banks pile on the account fees and other inconveniences, customers are starting to shop around. But to get the best banking bang for your buck, you need to be able to weigh all the options - and that means including credit unions.

Consumers often overlook credit unions because they assume they won't qualify for membership, according to Chicago bankruptcy attorneys. But many unions have been opening their doors to the general public, meaning you might be eligible for their notoriously lower rate credit cards and car loans. Hey, when you're struggling to manage bills and debt, a more affordable interest rate goes a long way.

Continue reading "Compare Banks and Credit Unions to Make the Most of Your Money" »

If you've got too many debts to keep track of, consolidating them into one big bill makes sense, right?

In theory, yes. Reality, however, is another story.

If you're like most folks, you've probably heard debt consolidation companies claim they can lend you money to pay off your debts at a lower interest rate. But what you're hearing is only half the story. That's because a debt relief company that wants your business isn't going to tell you the truth - that signing up for their services can actually leave you in more debt than before.

Continue reading "Debt Consolidation Scams Can Actually Keep Chicago Consumers in Debt" »

You know you're not supposed to exceed your credit card limit, but did you know that just getting close can hurt your credit score?

Every month that you carry a high balance on one of your credit accounts, you look like a risk to lenders - even if you eventually pay that balance off in full, say Chicago bankruptcy attorneys. The good news is, the damage is only temporary, assuming you maintain good credit habits like paying your bill on time and not actually going over your limit. The bad news is, it can really hurt you if you ring up that large balance at the wrong time.

Continue reading "How Having a High Credit Card Balance Can Hurt Your Credit Score" »

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" »

Would you give up your paycheck to get paid earlier? Doesn't make sense, does it?

But millions of Americans do just that by taking out payday loans.

When you're strapped for cash and payday is days away, a short-term loan can look like a quick solution. Get the money now, pay for it later. But the problem is short-term loans mean high-interest, and interest rates don't get much higher than at payday loan centers, where paying $100 for borrowing $300 is not uncommon - and annual interest rates can exceed 500%. Makes your credit card APR look cheap, huh?

If you're not already in debt, relying on payday loans is a sure way to get there. Here's why.

Continue reading "Payday Loan Scams Are Putting Chicago Workers in Debt" »

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" »

If you know what it feels like to be struggling with debt, chances are you don't want your loved ones to go through the same thing. So when someone close to you asks you to co-sign a loan, it makes sense to want to do your part.

But though it might seem to make sense for your friendship, it doesn't make sense for your finances, say Chicago bankruptcy attorneys. In the end, sharing that loan might mean the end of your relationship.

Continue reading "Co-signing a Loan Can Mean Debt Trouble for Chicago Residents" »

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" »

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 " »