Chicago Bankruptcy Lawyer Blog

The recession may be good for something after all: getting rid of debt.

On the one hand, tough economic times are making consumers more reliant than ever on credit, say Chicago bankruptcy attorneys. Many of us have been piling new debts on top of the balances we carried before the recession hit. On the other hand, that extreme financial distress is encouraging consumers to do something many of us once thought unthinkable - file for bankruptcy.

And, lo and behold, we're finding out that it works.

Continue reading "More Consumers Turn to Chapter 7 Bankruptcy to Relieve Debt, Say Chicago Bankruptcy Attorneys " »

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" »

The recent recession did more than change our finances - it also changed out attitudes, according to Chicago bankruptcy attorneys. And that's a good thing.

Many of us are vowing to make 2010 the year we finally find freedom from debt. And our new treatment of money means some of us have a head start we didn't even know about. How did it happen? Many Americans lost work hours or changed jobs in the past year or so. But instead of simply cutting back by the amount we gave up in salary, we've been changing our lifestyles. We're doing more with less.

Yes, some of us are working longer hours to make ends meet, but the vast majority are filling some of that extra time with not looking for new work, but finding new hobbies - cooking more at home, starting a backyard garden, taking classes at the local community college, reading books, checking out museums and other cool stuff in our hometowns, getting outside or - here's a novel idea - actually spending quality time with our families. Crazy, I know. Fortunately, there's a way to balance our new lease on life with debt-free future - bankruptcy.

Continue reading "Chicago Bankruptcy Attorneys Explain How the Recession Is Helping Us Live Better with Less Money" »

We often hear about how we shouldn't rely so much on credit. But rarely do we hear the other side of the story - the fact that many of us could no longer qualify for more credit if we wanted it.

Just a few years ago, lenders were handing credit out like candy - in the mailbox, at stores, on college campuses and through subprime mortgages. Heck, I even know 5-year-olds who were offered credit cards through the mail. But if banks are at fault for giving out credit consumers couldn't afford, we have to take some blame for spending what we couldn't afford. Many folks (myself included) once used that credit as an excuse to spend more than we earned. The end result? An economic meltdown that's caused consumers to default on their debts - and scared banks to get stingy with future credit.

So if credit is so dangerous, what's the problem if we have less of it? Because our economy needs some credit to get back on track.

Continue reading "Consumers Credit Is Getting Harder to Come By" »

If your financial state has you struggling for something to be thankful this year, take heart - at least your holiday meal won't cost as much as last year.

For the first time in almost a decade, the price of a Thanksgiving meal has dropped.
A traditional dinner of turkey, mashed potatoes and gravy, stuffing and all the fixings will cost an average of $42.91 for a group of 10 people, roughly 4% less than it did a year ago, according to the American Farm Bureau Federation.

It might be hard to imagine (I know I grit my teeth every time the grocery store clerk rings me up) but food prices have indeed declined as a result of lower energy costs and the effects of the recession. As an economist noted in a farm bureau press release, the cost of a Thanksgiving meal now costs less per person than a fast-food restaurant "value" meal. Such savings often goes unnoticed as we struggle to put food on the table while our boss is freezing wages and eliminating bonuses - or, worse, cutting our job. But, since this Turkey Day is all about giving thanks, there's no better time to focus on the positive.

Continue reading "Thanksgiving Meal Costs A Little Less This Year" »

Short on cash? How about turning some of your trash into treasure?

Every time I start complaining that I don't have enough living space, I clean my closet and realize that it's me, not my house, that's the problem. And unless you're a neat freak, I bet you've got a stash of unused stuff somewhere, too.

But purging your junk doesn't just free up more space. It can also free up cash - especially handy now that the holidays are upon us (read on for a more permanent way to free up money).

Take your old jewelry, for instance. Gold is going for a record $1,119 per ounce as investors buy up the precious metal in hopes of protecting themselves against a falling dollar. Have some of your mom's gold jewelry from 20 years ago, maybe something that doesn't carry much sentimental value? You can get a pretty penny for it - and clear out some space in your jewelry box at the same time. (Word to the wise, though - get it appraised by a professional, not a pawn shop or someone in a TV ad, to get your fair share.)

Continue reading "Selling Unused Stuff Can Be a Golden Opportunity for Cash" »

Sometimes finding help is as easy as asking for it.

Uncle Sam heard our cries for help loud and clear - in one particular case, at least. With the housing and job markets lagging behind recent economic progress, Congress has just opted to expand a popular homebuyer tax credit and continue handing out unemployment checks.

So what does that mean for you? If you're in the market for a house, you could still be in line for the $8,000 tax break that was originally set to expire at the end of the month. And if you live in a home you've owned for five years or more, you're now eligible for up to $6,500 off your taxes. Without a job? Unemployment will be extended by another 14 weeks (20 weeks in states with unemployment of more than 8.5%).

Once upon a time, Americans lost their homes, cars, possessions and reputations because they were too embarrassed to seek help. But that's changing - help is coming to you. You just have to keep your eyes open.

Continue reading "Uncle Sam Extends Homebuyer Credit, Unemployment Checks " »

Economists have spent weeks pointing to signs that the recession is over, but many Americans are having a hard time believing it.

Despite a pickup in retail, real estate and the stock market, foreclosures are still on the rise, increasing 5 percent just since summer. Unemployment - right now at a 30-year record of 9.8 percent - continues to edge upwards. The cost of living, as always, is outpacing our salaries. And we're more in debt than ever. The economy might be starting to expand on paper; in real life we're still feeling its effects - and might be for some time.

But despite all that, there's good reason for optimism. First, understand that some of the bad news can be attributed to a lag effect. People are still out of work because employers don't want to rush into spending money until they can confirm the economy is recovering - or they may not have the money to spend, period. And when folks aren't earning money at work, it's awfully hard to make their mortgage payments - meaning foreclosures will naturally go up for awhile. In short, just because an expansion isn't obvious right away, doesn't mean it's not there.

Second (and probably more importantly) realize that most folks can improve their financial situation whether the economy recovers today or tomorrow. You don't need to wait for the end of the recession to have a clean slate! Your financial freedom rests in your hands.

Continue reading "Create Your Own Economic Recovery When You Eliminate Debt" »

Today's economy is bad for a lot of things - stress levels, job security and housing prices to name a few. But, believe it or not, it might be good for your health.

Life expectancy actually increased during the Great Depression, according to new research by the University of Michigan. Think it sounds like a fluke? Then how do you explain the fact that researchers found the same pattern in recessions during the 80s and 90s and in countries other than the U.S.?

The theory is that people unknowingly engage in healthier behaviors when times are tight. They smoke and drink less because they have less expendable income to buy cigarettes and alcohol. They drive less and walk or bike more because gas is expensive. They eat out less, and thus eat healthier, to save money. They might even get more sleep, since there's less pressure at work when business is slow - or maybe they're out of work altogether. It seems that the same habits that could save your bank account might also save your life.

Continue reading "Bad Economy Might Have Health Benefits" »

As usual, reading the financial headlines today made my head spin.

On the one hand, it was just announced that the economy shrunk at a much slower rate than expected this last quarter - only 0.7 percent compared to the 6.4 percent drop during the first three months of the year. According to the Associated Press, this supports the belief that the economy is actually growing. That's good news. But wait - according to this story in the Chicago Tribune, consumer confidence plummeted unexpectedly due to job security concerns. It looks like retail will probably be down this holiday season, hurting recovery. Hmmm, not so good news.

Up, down, up, down - it's hard to know what to believe or how to feel about the economy. At times like this, I tune out and worry about the one thing I can control - my personal finances.

Now, I'm not denying that the recession is real or that the economy has an effect on our bank accounts. Hey, I've been feeling the pinch, too. But sometimes I think the recession is a scapegoat for problems we would have had anyway - which is actually good news.

Continue reading "Watch Your Bank Account, Not the Headlines" »

Forget iPhones, jewelry and designer jeans - the latest trendy accessory this fall is a purse with tight strings.

Yes, the nation with a negative savings rate has finally gone frugal. According to a poll taken this spring, 32 percent of the country believes spending less has become a permanent way of life.

We're increasingly growing our own food, opting for carpooling and public transit over our own gas-guzzling cars and choosing thrift store finds over designer duds. We're switching generic for name-brand. We're giving up the little luxuries that come with not-so-little price tags. In short, we're learning to spend within our means.

So with all this newfound savings enlightenment, you'd think that we'd be through with our money troubles. But unfortunately, it's more complicated than that thanks to credit.

Continue reading "Pay Down Debts First to Get the Most Out of Savings" »

It's a three-day weekend and, in theory, we're supposed to be relaxing. But these are stressful times, particularly here in the Windy City.

For the second year in a row, Chicago has been dubbed America's most stressed-out place to live by Forbes magazine - and it's largely thanks to the economy. Unemployment is at 11%, higher than the 9.7% national average. Property values have fallen fast. And the cost of living isn't exactly cheap.

But while I agree all these factors help make Chicago frazzled, I certainly don't think they make it the only stressful place to live. Just look at the national statistics. About one-quarter of participants in a recent sleep study said they are getting less shut-eye because of the recession, according to Forbes. And more than half the people in a healthcare survey said they are cutting back on medical expenses.

Stressing over the economy makes sense, but it doesn't make life any easier. Being under constant pressure isn't good for your health (and you want to save on medical bills, right?), nor is it good for your finances (I know my biggest shopping sprees happen when I'm having bad days, not good ones).

If your stress-o-meter is overwhelmed by the recession, it's high-time you figured out how to lighten up. And the best way to do that could be lightening your debt load.

Continue reading "Chicago Economy Helps Earn City 'Most Stressful' Title" »