Chicago Bankruptcy Lawyer Blog

Income taxes aren't the only thing to dread come spring - but there's a silver lining.

With warm weather on the horizon, gas prices are starting their typical upward climb, say Chicago bankruptcy attorneys. The price at the pump is up 9 cents this month and fast approaching a $3 a gallon national average. That's an increase of 81 cents over last year, according to AAA.

Now here's the good news. First, a rising Illinois unemployment rate - about 11 percent as of January - may come in handy when it comes to gas prices. Less folks driving to work means less demand for oil, and possibly an affordable summer at the pump. Second, there are some easy ways to save money by offsetting the rising cost of gas.

Continue reading "Chicago Gas Prices Go Up As Spring Approaches" »

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" »

Remember cash for clunkers? Well, how about rebates for refrigerators?

Uncle Sam has $300 million in stimulus money, and he wants you to buy a new fridge - or washer, dryer or HVAC, according to Chicago bankruptcy attorneys. The point, of course, is to encourage consumers to start spending - but also to replace old, outdated appliances with new, energy-efficient ones. Modern washing machines, for instance, use about half the water as their older counterparts. They also squeeze out more water during the spin cycle, meaning you'll need less energy to dry your clothes as well.

If you're in the market for new appliances, this might be the time to do it. However, it's important to weigh the pros and cons of the rebate program - especially if you're already struggling to make ends meet without a new fridge to pay for.

Continue reading "Chicago Bankruptcy Attorneys See Pros and Cons to Cash for Appliances Program" »

You can't believe everything you read - especially when it comes to your bank, say Chicago bankruptcy attorneys.

Many banks are sending out letters urging customers to sign up for overdraft protection, a program that allows your bank to authorize a debit purchase - even if there's not enough money in your account to cover it. Some letters are going so far as to threaten customers, warning that their debit cards won't continue to work unless they contact their bank immediately, according to the New York Times.

With bold font and terms like "emergency" and "contact us immediately," these messages can be unnerving - not to mention confusing - for folks who frequently rely on a debit card to make purchases. But their purpose is actually very simple - they're advertisements. And you shouldn't fall for them. Overdraft protection isn't about saving you the hassle of overdrawing; banks want you to sign up so they can charge a fee each time they authorize money because you don't have enough to cover a purchase. Here's the real story on overdraft protection.

Continue reading "Chicago Bankruptcy Attorneys Warn Consumers About Overdraft Protection Fees" »

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" »

Gone are the days of teenagers getting credit cards before their drivers licenses, thanks to new credit card legislation, Chicago bankruptcy attorneys say.

Starting Feb. 22, members of the under-21 crowd won't be able to get a credit card unless they can either demonstrate an independent source of income or provide proof of parental permission.

Overall, it's probably a pretty smart law - but I've got a couple complaints. First, that they didn't pass this thing sooner, before me - and my first credit card - went to college. Second, that it really only puts off the inevitable. Sure, relying on a checking account - and being limited by the cash in that account - is a good experience. But chances are, most kids are going to end up with at least one credit card someday. Regardless of whether you get that card when you're 15 or 40, you're going to have to learn how to manage it to avoid debt.

Continue reading "Chicago Bankruptcy Attorneys Say Credit Card Companies Tighten Restrictions for Young Consumers" »

Love is supposed to be in the air, but it can be hard to feel positive when your bank account is, well, negative.

But whether you think of Valentine's Day as the most romantic day of the year or just another excuse to spend money cooked up by card companies, you can make the most of the holiday without going broke - even if you're in debt, according to Chicago bankruptcy attorneys.

Continue reading "Show Your Bank Account Some Love This Valentine's Day, Say Chicago Bankruptcy Attorneys" »

Ever try to fix a bad day with retail therapy? I know I have.

Sometimes it's all too tempting to drown out nagging worries or unhappy experiences by trekking to the mall for something bright, shiny and new. And to some extent, it works - if you make sure to keep your purchases realistic and within your budget, say Chicago bankruptcy attorneys.

Problem is, when we're not feeling our best our judgment can get clouded, making it harder to stick to everyday limits. Have you heard of emotional eating? Well, this is emotional spending. And it can add up - especially if you're already in debt. Though it's no simple task to stop something you do unconsciously, you can change your behavior fairly easily before it happens by identifying - and learning to avoid - certain triggers.

Continue reading "Chicago Bankruptcy Attorneys Offer Tips to Curb Emotional Spending" »

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" »

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" »

Some rules were made to be broken - and paying off your debt is no exception, say Chicago bankruptcy attorneys.

Common wisdom has always held that it's best to pay off the debt with the highest interest rate first - and for good reason. This way, you'll save the most money because you'll be avoiding the biggest future payments, and you'll keep your most expensive debt burden from growing.

But there's a downside to this strategy. As you know, the key to lowering debt is to pay more than the minimum balance, since small minimums like 2-4% might not cover much more than interest. And if you're only paying interest, the principal - the actual amount for the items you purchased - will stay the same, meaning you'll have to keep making those interest payments indefinitely. Problem is, people often get discouraged if they find it difficult to pay enough to cover a high interest rate plus some of their principal. And they use this as an excuse to quit.

Continue reading "Chicago Bankruptcy Attorneys Say Paying Off Any Debt Is Better Than Doing Nothing" »

It's nearly impossible to turn on the TV or computer without being startled by images of the dire situation in Haiti. And while we all wish that we could undo the damage (and many of us are generously opening our wallets to help try), we can also take home a lesson from the tragedy about the real meaning of hardship.

Many of us are struggling to pay the bills and fend of foreclosure. But regardless of what our outcome is, most of us will have food, running water and a roof over our heads - whether it's in a roomy house or a shared apartment. Worst case scenario, we have family, friends or organizations available to help us get back on our feet. Haitians don't have that luxury right now.

Now, I don't mean to indicate that we're in any way superior just because we're American. Lucky, is more like it. What happened in Haiti two weeks ago is a combination of geography, economy and pure bad luck. And hopefully, the country will be able to rebuild with global help so that, whatever happens in the future, they'll have the infrastructure and resources to survive. My point is, no matter what your situation, it could always be worse. There is always a reason to be grateful -- even when debt seems to be running your life.

Continue reading "Finding Debt Relief Might Be Easier Than You Think, Say Chicago Bankruptcy Attorneys" »

It's bad enough that we have to deal with pushy retailers and their promotions when we go to the mall, but now they're following us into our home, say Chicago bankruptcy attorneys.

When you fill out online surveys, enter drawings at stores or even use your credit card to pay, you're giving retailers access to your personal information. Next thing you know, your mailbox is filled with catalogs and your inbox with ads, and the phone is ringing off the hook with store employees who want to tell you about their next big sale. Ever visited eBay or Amazon and saw a homepage filled with a bunch of stuff you like? It's no coincidence - those picks are just for you, based on what you've been viewing online.

That's fine if you have all the money in the world and don't mind the harassment. But for the large majority of Americans -- many of us struggling to balance paying off debts with making the mortgage - it's just another obstacle to financial freedom.

Continue reading "Chicago Bankruptcy Attorneys Say Protect Privacy to Stop Harassment and Save Money" »

When your car is in the shop, you know you can ask a friend for a ride. When you find a new home, you trust you can rely on your family to help you move. But when it comes to getting help with debt, most of us don't even bother to ask, Chicago bankruptcy attorneys point out.

Sometimes it's denial. We don't realize how much we're spending until we open up our bills, and then - unable to pay - we push the problem to the back of our minds. Other times, it's fear. Yes, we know we're in financial trouble, but we don't know where to turn so we do nothing. In the short term, trying to handle a mountain of debt alone might mean living paycheck to paycheck. In the long run, though, it could mean losing your house to foreclosure or worse.

Finding your way out of debt might not be easy, but it can be done. And, as the old saying goes, two heads are better than one.

Continue reading "Chicago Bankruptcy Attorneys Say Sometimes Lowering Debt Is As Easy As Asking For Help" »