Chicago Bankruptcy Lawyer Blog

Banks are big businesses that we rely on to keep our money safe and our accounts secure. Many banks, despite help from the government, lose their way and need bailed out by other banks that have the finances to overtake them.

We have seen this quite often in the last few years. But transitions don't always go smoothly and many times mistakes are at the expense of the customer. Consolidations often cause errors in customer records, which have a lasting negative effect on bank clients. Bank customers who don't check their accounts routinely can find themselves in the midst of a credit debacle when applying for car loans, mortgages, or home equity loans.

Erroneous accounts lead to lenders denying loan applications for customers who wouldn't normally be denied. Chicago Bankruptcy Lawyers know that the behavior of banks has had much to do with the economic problems facing consumers. Banks have swung from free credit to no credit. Understanding your rights as a debtor is critical to protecting the financial well-being of you and your family.

The Chicago Tribune recently reported about a woman in jeopardy of personal bankruptcy after a bank take-over which ultimately ruined her credit score. A respectable business woman and entrepreneur, she discovered that her bank was double-reporting her loans to credit bureaus following a takeover of her original bank. Potential lenders denied her loan applications because on paper, she looked like she was way over extended.

Unfortunately, it's not an uncommon problem. "Bank A acquires Bank B, and during the absorbing of Bank A something goes awry and accounts get misreported to the credit bureaus," states a former executive with a credit reporting firm. The former executive personally went through the same situation and is currently serving as an expert witness in a similar case.

We posted previously on our Chicago Bankruptcy Lawyer Blog how important credit scores are when applying for loans because high ratings can ultimately save you money.

After years of fighting with the bank to repair the error made on her credit, the Winnetka businesswoman filed a federal suit. Following her first complaint over 5 years ago, she saw her FICO score fall in excess of 75 points. Then, seeking help from a credit-repair firm, she was told the errors were not fixable. In total she has five loans with the bank totaling $3.8 million but the misreporting made it look like she was over her limit on all five loans. The judge has dismissed some claims but has upheld a complaint that the bank pulled her credit report when she had not applied for a loan. Bank customers are protected by the Fair Credit Reporting Act which states credit reports cannot be reviewed without the permission of the client.

Continue reading "Chicago Bankruptcy Attorneys Warn of Risks of Bank Consolidation" »

Consumer spending in February increased at the quickest rate in four months, the first time the economy has showed signs of life in some time. But as it turns out, most of the spending was on one thing - gas.

With gas prices hitting new highs of $4 a gallon in some cities, economic indicators might be a bit skewed, point out Chicago bankruptcy attorneys. And things were just starting to look up - last quarter saw the highest spending growth in years, at about 4 percent. Now economists say that thanks to rising fuel costs, that number could drop by half for the first few months of 2011. So what's a struggling consumer to do?

Continue reading "Chicago Consumer Spending Is On the Rise - Or Is It?" »

It's nerve-wracking enough to field calls from bill collectors over your own debt - but what if they're harassing you about a debt burden that belongs to someone else?

It's more common than you may think. Six years after moving into our house, I still receive the occasional call for someone named Brandi who was likely the former owner of our phone number - and obviously in some dire financial straits. But the calls came with a lot more frequency after we first moved in - sometimes more than once a day.

Continue reading "Are You Being Harassed Over Someone Else's Debt?" »

Remember last decade's adjustable-rate mortgages? You know, the subprime loans that led to millions of mortgage defaults across the country - and pretty much launched the whole recession? Well, they're back.

But this time around, lenders say they're different - and depending on your financial situation, they may be able to help you afford a home. In the past, ARMs came with risky gimmicks, like rates that adjusted every six months (seriously, how can you keep up with that?) and an option that allowed people to put off paying interest - leading to a huge bill later down the line.

Today's ARMs are far more conservative, explain Chicago bankruptcy attorneys.

Continue reading "Should Chicago Homebuyers Opt For New Adjustable Rate Mortgages?" »

As if it isn't bad enough that most folks are paying upwards of 20% in credit card interest, now Chicago consumers are paying a premium to use cash, too. But it doesn't have to be that way, say Chicago bankruptcy attorneys.

It's no news that withdrawing money from another bank's ATM will result in a fee - both from your bank and the competitor whose machine you're using. Usually those fees have ranged between $2.50 and $3. But Chase recently announced it's trying out $5 ATM fees for non-customers in Illinois. If you're taking out just 20 bucks, that's the equivalent of 25% interest - even more, when you factor in the penalty your own bank will levy.

If customers are willing to pay these outrageous rates, other banks will likely follow suit. Have Americans really become so reliant on convenience that we're willing to fork over a quarter of our income just for the ease of using the nearest ATM?

Continue reading "ATM Fees Add to Chicago Consumers' Debt Woes" »

It's that time of year again - and I'm not talking about doing your taxes.

Spring starts tomorrow, and it's the perfect excuse to get organized. If you've been neglecting your family budget, your growing debt, or your spending habits, it's time for a financial version of spring cleaning. Even if you've gotten organized in the past, it's good to give your finances an annual tune-up, explain Chicago bankruptcy attorneys. Here's how.

Continue reading "How Organizing Finances Can Help Chicago Consumers Save Money" »

When the bills pile up and the budget is stretched tight, cutting back on shopping sprees seems like the rational thing to do. But for emotional spenders, it's not so easy.

Debt causes emotional discomfort - no argument there. For many of us, that stress becomes a great motivator for finally getting our finances under control, whether it's by reworking our budget, making more than our minimum monthly payment, or seeking help from a Chicago bankruptcy attorney. But a portion of the population deals with financial stress a little differently - by doing more spending.

Similar to the way someone on a diet might go on an eating binge after falling off the wagon, some consumers deal with money problems by splurging on clothing, shoes, makeup, electronic gadgets, you name it, without so much as glancing at the price tag. Sometimes binge shoppers end up returning most or all of their loot - but there are still consequences.

Continue reading "When Financial Stress Causes Chicago Shoppers To Overspend" »

You might have fought hard to afford your mortgage payments - but most homeowners assume the battle is over when the foreclosure notice comes in the mail.

Not true, say Chicago bankruptcy attorneys. Sure, being this close to losing your house is not a good position to be in. But you do have one more shot to fix your financial situation and keep your home. Bankruptcy has the power to stop foreclosure while you and the court work out a payment plan with lenders. Many folks aren't aware that bankruptcy is an option - or they mistakenly worry it will wreck their credit. In reality, it can do just the opposite, according to MSNBC.com.

Continue reading "Chicago Homeowners Can Stop Foreclosure With Bankruptcy" »

This year's average tax refund is more than $3,000 - but there may be a way to stretch it even farther.

With gas and grocery prices going up, it would be easy to allow that money to simply disappear, say Chicago bankruptcy attorneys. A couple bills here, a little shopping splurge there, some unexpected car repairs, and - poof - your bank account is back to where it was before. But there's a way to keep your refund alive long after you deposit it. How? By putting it to work for your future.

Continue reading "Chicago Taxpayers Find Secret to Getting Bigger Refund" »

If your grocery receipts have you doing double-takes lately, you're not alone - those higher prices aren't just in your head.

Food prices - along with gas and many other necessities - are going up, much like they did back in 2008. While we can cut back on fuel costs by driving less and adjusting the thermostat, we can't exactly stop eating. But when you can't buy less, you can still buy smarter, say Chicago bankruptcy attorneys. If you want to win in the supermarket battle, you need a good offensive and defensive shopping strategy.

Continue reading "Ways Chicago Consumers Are Fighting Rising Food Prices" »

Most credit cards are designed to keep you in debt. But what if they could help you lower debt instead?

That's what TD Bank says it's doing with a new credit card that offers a reward for paying more than the monthly minimum. It makes sense - at least in theory. Typical rewards cards give discounts for airline miles or shopping, encouraging consumers to spend more money, say Chicago bankruptcy attorneys. But if you're drowning in debt, you should be spending less, not more.

Continue reading "Could New Credit Card Help Chicago Consumers Keep Spending In Check?" »

Getting a college degree is supposed to help you earn money - but lately, some students have been losing money thanks to a growing number of financial aid scams.

For many folks out of work or looking for a way to boost their current income, going back to school seems like a logical solution. Problem is, it can be an expensive one. Average college tuition in the U.S. is over $12,000 - not including room and board, books and other fees. As a result, most college students need some kind of financial help. And their desperation can make them extra susceptible to criminals, say Chicago bankruptcy attorneys.

Continue reading "Financial Aid Scams Take Advantage Of Chicago College Students" »

Some things are easier said than done - and it looks like that might be the case when it comes to retaining the smart saving and spending behavior so many Americans adopted in response to the recession.

Last year, 63% of consumers said they had modified their money habits because of the economy, according to a poll by Citigroup. Just one year later, that number has dropped to 52%. Incomes are on the rise once again, and apparently so is consumer debt - one of the problems that led to our economic troubles in the first place. Could budgeting and avoiding debt end up like the majority of New Year's resolutions - out of sight, out of mind? That depends, say Chicago bankruptcy attorneys.

Continue reading "Will Americans Keep Frugal Habits or Fall Back in Debt When Economy Rebounds?" »

It used to be that kids wanted a cash allowance - today, they want a credit card of their own.

Credit card companies like Visa and MasterCard are increasingly marketing prepaid debit cards to teens and preteens. And they're convincing parents to buy the cards for their kids by pitching them as an easy way to teach children about finance. But these junior credit cards may be doing more harm than good, say Chicago bankruptcy attorneys.

Because prepaid debt cards can be loaded with a set amount of money, they show kids how to control their spending - at least, that's what credit card companies are trying to convince parents. In reality, the cards come with all kinds of fees - activation fees, maintenance fees, reloading fees, etc - that can leave kids with early debt and Mom and Dad footing the bill.

Continue reading "Credit Card Companies Targeting Kids With Prepaid Debit Cards" »

Uncle Sam is extending your tax deadline - but you might prefer to say no thank-you, say Chicago bankruptcy lawyers.

Because of a Washington D.C. holiday on April 15, the government is giving taxpayers until the following Monday - April 18 - to mail in our tax returns. But there's no reason to wait until the 15th or the 18th. The IRS officially began accepting returns this week - even for folks who plan to itemize deductions (officials previously told itemizers to hold off until new tax laws went into effect). And the sooner you file your taxes, the sooner you may be able to get that tax refund - and reap the benefits.

Continue reading "Chicago Taxpayers See Benefits of Filing Tax Return Early" »