Chicago Bankruptcy Lawyer Blog

Americans spent more - but earned less - in January, say Chicago bankruptcy attorneys.

Personal spending was up 0.5 percent in the first month of 2010, according to The Commerce Department. That would seem to bode well for economic recovery, except that incomes in January rose by just 0.1 percent, much less than what economists had predicted - and the worst rate in four months.

There's good and bad news. First, the bad. As a result of more spending and less money, the savings rate has dropped. Last year Americans saved 4.3 of our incomes - the highest rate in over 10 years - but in January we only saved 3.3 percent. We might be spending more now, but without raises (and in some cases, jobs) we could eventually run out of steam, stifling economic recovery. But here's the happy news. Our savings rate is still a huge improvement over the negative rate we had before the Great Recession. And hopefully we can keep it up by slowing our spending to match our incomes.

I know it's not easy, especially when the recession - and the threat of layoffs and foreclosure - drags on. But there are ways to make saving money a little easier.

Continue reading "Chicago Bankruptcy Attorneys Say Americans Spend More But Earn Less" »

As if it isn't annoying enough that credit card and bank account fees are getting higher, now health insurance premiums are poised to jump skyward, according to Chicago bankruptcy attorneys.

In at least six states, people who buy their own insurance could see rates rise by at least 50 percent, according to the Associated Press. And they're not alone - employees with insurance plans through work have been seeing 5 percent more on average amounts carved out of their paychecks.

Americans deserve affordable health insurance, whether it comes from a government option or not. But in the meantime, some insurance is better than none - and canceling your plan to save money might be a risk you can't afford. Unless you can accurately predict the future, gambling that you won't get sick is a bad bet. An unexpected illness or hospital stay can cost you thousands more dollars than you'll save by not paying your monthly premium - in extreme cases, it could cost you millions. Fortunately, there are ways to lessen the pain of paying for health insurance so you can afford to be protected.

Continue reading "Healthcare Costs Go Up While Incomes Go Down, Say Chicago Bankruptcy Attorneys." »

So you lost your job last year and picked up some unemployment benefits. Once you find employment, you're out of the woods, right?

Not necessarily, say Chicago bankruptcy attorneys. Unemployment benefits sure come in handy when you need to put food on the table. But they can also cost you. As it turns out, unemployment benefits are taxable after the first $2,400 - or $4,800 per married couple. After that amount, you'd better start treating those payments as income, because they'll be taxed that way. Not sure how much you received last year? You should receive a Form 1099-G in the mail, which you'll need to report on your 1040.

Fortunately, there are ways to offset some of the damage - and not just of unemployment benefits, but of any surprise tax.

Continue reading "Chicago Bankruptcy Attorneys Recommend Cash Cushion For Tax Season" »

Do you ever get the feeling that you're eating up your paycheck faster than you can spend it? You're not just imagining things, according to Chicago bankruptcy attorneys.

Prices of grocery items like bread, milk and meat are rising faster than most salaries. The average American family of four spends about $600 a month on groceries -- or about $7200 annually. If you make $40,000, it's like you're devouring one-fifth of your paycheck - probably closer to one-quarter if you count all those restaurant meals.

Food obviously isn't something you can cut out of your budget, but that doesn't mean you can't save money on groceries. The kind of food you buy, when you buy it and where you buy it can potentially save you thousands of dollars a year and even improve your health, which could in turn lower your medical bills.

Continue reading "Chicago Bankruptcy Attorneys Tips for Saving Money on Grocery Shopping" »

Bad news for married women (or good news for men): wives are no longer seeing the economic returns that they once did from marriage, Chicago bankruptcy attorneys say.

On the upside, women have come a lot way since 1970 and earlier, back when marriage meant a significant boost in income courtesy of their husband. We've surpassed our male counterparts in both education and salary over the past four decades. More men than ever are married to women who earn more than they do and, vice versa, more women are married to men who earn less. In fact, nearly one-quarter of women earn more than their husbands today, compared to a measly 4 percent in 1970, according to the Associated Press.

But there's still a major inequity. Though we've been increasing our earning power, women are still earning just 78 cents for every dollar a man takes home. And much of that hard-earned income is going to bills for debt.

Continue reading "Chicago Bankruptcy Attorneys Say Marriage No Longer Means Economic Benefits for Women" »

Those late payments can cost a lot more than the late fees they result in.

When consumers take longer to pay their bills, businesses have less cash handy to pay their own bills, setting off a cycle that slows down the entire economy, Chicago bankruptcy attorneys say. Statistics agree. Legal firms, for instance, received payments approximately three days later in 2009 than in 2008, according to financial information firm Sageworks. Architectural and engineering businesses waited closer to five days longer, while poor tax preparers and bookkeepers saw wait time for their money increase by 10 whole days.

In most cases, the economy is out of our control. But this might be the one time when you can make an impact on the bigger economic picture. By reducing your debt, you can free up funds to pay your bills on time, bidding adieu to late payment fees and boosting the economy at the same time.

Continue reading "Chicago Bankruptcy Attorney Tips for Avoiding Late Payments" »

Good news on the job front. With the economy picking up steam, employers are again warming up to the idea of raises, bonuses and 401k matches, according to USA Today.

It's a welcome change going into the new year. But it also brings up a couple good points.

First, getting a boost from your boss is not a given. As the article pointed out, 40 percent of employers said they plan to review salaries based on employee performance next year, according to a Towers Perrin survey. You might already know this, but a poor economy is no time to be slacking off. Nor is an improving economy, as businesses might be preparing to hire again - and there are plenty of experienced, educated and job-hungry candidates flooding the market.

Second, and maybe most important, a raise doesn't necessarily mean more money. As a wise old man once said, it's not the size of your wallet that counts, but the way you spend it.

Continue reading "Chicago Bankruptcy Lawyers Say Workers Could See Rise in Raises and Benefits" »

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" »

There's a lot of (legal) pick pocketing going around, but that shouldn't mean we have to put up with it.

Remember last month when we discussed the growing cost of credit cards? In response to new legislation meant to protect consumers from unfair fees and term changes, credit card companies are lowering limits, raising rates and adding brand new costs - like an annual fee or a penalty for non-use.

Now, banks are getting in on the action by becoming greedier with their checking accounts. Unlike a credit card - which, believe it or not, you can choose whether or not to use - checking accounts are pretty much a necessity now that we don't hide our cash under the mattress like Grandma did. So it was a little disturbing when I noticed my former bank had started charging a $9 account maintenance fee each month.

Continue reading "Banks Find Ways to Make Checking Accounts More Expensive, Chicago Bankruptcy Lawyers Say" »

It's official. For the first time since maybe the Great Depression, a generation is making less than our parents.

People 54 and younger have seen their incomes decline since 2000, leaving the age group the poorest it's been since the 1970s, according to a report by USA Today. And it's not fresh-faced college grads facing the worst of the pay hurdle. Surprisingly, the hardest hit seem to be folks in their late 20s, early 30s, and 40s - people who have a little to a lot of experience under their belts.

Older workers are actually seeing an increase in earnings, but not because they've somehow managed to escape the effects of the recession. Instead, it's assumed that hard times are forcing older generations to put a hold on retirement. So they continue working into their golden years, and push us younger folks out of the workplace while they're at it.

Combine all this with the latest unemployment rates and you get a pretty depressing picture. But there are two sides to every story.

Continue reading "Younger Generation Sees Smaller Paychecks" »

Labor Day weekend is fast approaching but, for many of us, labor has already been on the brain for months. Nearly 10% of Americans are unemployed. Many more are worried we could become unemployed. Some of us are working more than one job just to make ends meet. And I don't think I'm going out on a limb when I say that nearly all of us are feeling underappreciated in terms of payment.

Despite the fact that labor productivity - the amount of work output employees provide per hour - rose at the fastest pace in six years, employers just aren't ready to start giving raises. Instead, they're pumping that extra money back into their suffering businesses. But while you can't really blame a business owner for trying to survive right now, the lack of income takes a toll on the economy. Without higher pay in return for that higher productivity, consumer spending won't be able to increase - making recovery slower and more difficult. It's an unfortunate cycle.

But just because your boss isn't giving you a raise any time soon doesn't mean you have to go without. Why not reward yourself this Labor Day? Give yourself a raise.

Continue reading "Give Yourself a Raise This Labor Day By Reducing Your Debts" »

Become a mystery shopper and earn $7,000 a month! Work from home doing data entry for $10,000 a month! If you believed everything you read in the classifieds, you'd think that our economy has more jobs that it can fill. Not only that, but we'd all be stinkin' rich because everything pays so well.

Unfortunately, what sounds too good to be true usually is. Most work-from-home advertisements are actually scams set to take advantage of a workforce already reeling from furloughs and layoffs, lost retirement funds, rising prices and decreasing home values. These tricksters know you're looking for ways to make ends meet and they're betting that your desperation will outweigh your good judgment.

So how can you tell the legit offers from the fishy ones? Watch out for any job that requires money or personal information upfront.

Continue reading "Illinois Bankruptcy Lawyers Caution Against Work From Home Scams" »

I don't usually do well with change. I've had pretty much the same hairstyle since high school, I've been driving the same car since I got my license and I have a mini-meltdown every time Facebook changes its layout. So naturally, I've been banking with the same company - a large national bank that shall remain nameless - since I first started earning a paycheck. Until recently, that is, when I finally had enough.

Over the years, charges started showing up on my account. First it was $2 for paper statements, which were formerly free. I canceled them and chose e-mail only. Then it was $1 for every transfer I made between accounts. I had to start limiting transfers.

Then, since I didn't have direct deposit (a disadvantage of being self-employed), I became liable for a $10 "monthly maintenance" fee. I switched to another account that waived the fee if you kept a $1,000 minimum. It wasn't ideal, but I figured the minimum would be good to keep in an emergency, and most importantly I would avoid that annoying $10. Apparently not. Just months after I opened the new account, my bank upped the balance minimum to $1,500 without any notification. Another $10 down the drain.

Continue reading "Illinois Bankruptcy Lawyers Warn of Hidden Bank Fees" »

Some things never change. Despite the fact that oil was at a record low just six months ago, gas prices have begun their annual summer hike. And this year is poised to be a little more painful.

Though today's average national price of $2.68 a gallon is still lower than $4 a gallon peak we saw late last summer, we've hit 50 days of increasing prices - the longest consecutive rise since records that go back to 1996. Add that to record-high unemployment and foreclosures and you get the possibility of a pretty miserable summer for most drivers - at least financially-speaking.

In a recent post, I mentioned some tips for saving money this summer. In this case, the simple solution is to leave the car in the driveway.

Continue reading "Illinois Bankruptcy Lawyers Find Ways to Save Cash as Gas Prices Grow" »