Chicago Bankruptcy Lawyer Blog

A recent survey found that nearly one in two Americans can't make ends meet and pay basic bills in today's economic situation.

Chicago bankruptcy lawyers understand that times are tough right now. The economy has few signs of improvement and, generally, people are struggling to put food on the table and keep a roof over their head.

For a lot of these people, it's the constant threat of credit card companies, their collection agencies and other debts that have caused these problems. The lack of available funds are tied up in making low or minimum payments to credit card companies.

Considering bankruptcy in Chicago can help consumers get out of the problems they have encountered. Many debt problems aren't the fault of the consumer, necessarily.

Job loss could be a function of the economy and surprise medical bills can level a family. Lenders' high interest rates and exorbitant fees on late or missed payments can also contribute and make a bad situation worse.

A recent survey by Wider Opportunities for Women found that 45 percent of Americans live in households that struggle to pay their bills. That amounts to 39 percent of adults and 55 percent of children.

According to a recent Reuters article, the survey found that a family of four with two working adults pays $821 for housing and $707 for food each month. A single worker family pays about $688 for housing and $244 for food.

Those numbers don't account for vacations, hobbies, college and other expenses beyond the essentials. Some are worried that because a committee of lawmakers failed in its efforts to cut down debt by $1.2 trillion over 10 years, there may be cuts in programs that offer financial support. .

The article goes on to say that the poverty rate is $22,314 for a family of four and about 15 percent of Americans are at that level or below. Many more are just above it and require government assistance to get by.

For many of these people, filing for bankruptcy in Chicago would go a long way toward helping. For those who have some income but who are drowning in debt, Chapter 13 bankruptcy in Chicago may be a good option. This allows people to keep their assets and make a payment plan over three to five years to pay back a portion of the debt.

Chapter 7 bankruptcy is the most common form of bankruptcy and is typically for people who have no income and few assets. Their debts are cleared and they are allowed to continue on without making debt payments.

Both forms of bankruptcy can be helpful, depending on the circumstances. If you find yourself making large payments on credit cards or other forms of debt and teetering on financial disaster, bankruptcy may help. Eliminating debt can free up money to help pay other bills, which could help your economic status.

Continue reading "Bankruptcy in Chicago Can Help in Tough Economic Times" »

For people mired in debt, saving money sounds like an impossible goal. But a recent study found that keeping things simple and saving for one specific goal may be effective, reports MSNBC.com.

As Chicago bankruptcy lawyers reported recently, 1 in 4 consumers don't have any emergency savings and couldn't afford a $1,000 repair in a pinch. While that's not shocking given our current economic climate, it is concerning. What it means is that people are likely living off their credit cards to get by, which is a dangerous situation to be in.

People are hurting financially and while savings may be a great thing to think about, those in debt may not be able to consider it. But imagine if there was a time during which you could store away money in savings, in the stock market or in retirement to plan for the future instead of wondering how to get by today?

That's possible with a Chicago bankruptcy. Through this process, a person's debts can be cleared, which allows them to start fresh and get back on track without the headache of creditors calling and lenders angling for payments.

With the debt gone forever through these consumer protection laws, the person can start over and begin putting away for the future. It can be a freeing experience for those who have lived for years with high interest rates, low credit scores, hidden fees and minimum credit card payments.

According to the news article, a new research paper out of Toronto found that people did better at saving if they had one goal, instead of several goals that may be more difficult to obtain. What researchers found is that when people are told that it is important to save for a number of things -- a new house, car, college fund or other goal -- they try to prioritize which is most important and end up not doing well at putting away for any of them.

But on the other hand, if a person has one goal -- just the new addition to the house or the vacation -- it can be easier to implement it. The researchers found that people from different countries and different walks of life respond similarly to saving money.

An informal poll on the news web site shows that voters were split nearly evenly about how best to save money:

Having one simple goal, like going on vacation -- 33.7%
Having a few goals, like buying a house, sending the kids to college and retiring -- 32.8%
Saving money? That's a pipe dream these days -- 33.5%

Ask yourself where you fit among those three options. If you couldn't consider saving money because you're struggling with debt payments, consider meeting with a Chicago bankruptcy lawyer who can help you determine if you qualify for bankruptcy, what the process is like and how going through it can help your life in the future.

Continue reading "Can You Save Money in Chicago or is Bankruptcy an Option?" »

A savings account may be a luxury for many people trying to save money for their future, but for many Chicago families, saving money isn't as feasible as it once was.

With the economy struggling to recover and people dealing with job loss, high-interest loans and credit cards that have kept them buried in debt, filing for Chapter 7 bankruptcy in Chicago may be a sound option.

Filing for bankruptcy immediately stops creditors from calling and attempting to garnish wages and otherwise making life difficult. So, if a consumer is drowning in debt brought on by job loss, mounting medical bills, or predatory lending practices, consulting with an experienced Chicago Bankruptcy Attorney would be a smart move.

According to a recent survey, more parents are saving for their children's college education, but the rising costs of higher education, coupled with additional pressure from the poor economy, are hurting the future value of those savings.

The survey, conducted by Fidelity Investments, found that 67 percent of parents have started putting money away for tuition costs. That's a 9 percent jump from a 2007 survey, the first year the survey was done.

But more than half of parents who were surveyed are still paying off their own student loans and half are also paying an average of $576 per month for preschool or daycare. About 40 percent are paying for those obligations along with a college fund for their kids, too. That has increased 27 percent from five years ago.

Because of increasing college costs and people less able to save money, Fidelity believes the average American family will be able to pay for about 16 percent of college costs, based on savings. In the last five years, that number has dropped about 8 percent, while college costs have jumped nearly 26 percent.

The percentage of parents who believe it is their responsibility to pay for their kids' college has increased, and many are taking extra jobs to pay for the added expense. Some parents are asking their teens to take part-time jobs, live at home and commute, and consider public universities over private schools.

What this study shows is how the economy has affected the average household. Savings are a great thing to have, but many people are forced to decide between putting away money for junior's college fund or paying off the expensive purchase that now costs twice what the sticker price was because of high interest rates levied by credit card companies.

Saving money can sometimes take a back seat when bills are mounting and a family is getting behind making payments. Family members must make difficult choices, and for those who are absolutely devastated by debt, saving money is just not going to happen. For those people, bankruptcy could work.

Filing for bankruptcy halts all debt collection practices, including foreclosure, wage garnishment and collectors calling. It allows for consumers who have overwhelming debt to get a fresh start with their finances after the IOUs disappear.

Continue reading "College Savings Takes a Hit in Weakening Chicago Economy" »

A recent poll by the financial data publisher Bankrate.com indicates that 24 percent of American consumers have no emergency savings, The Associated Press reports.

It's not an entirely shocking statistic, but it is concerning. Those without savings are flying by the seat of their pants, especially in this rocky economic climate because job loss is a very real prospect for many in Chicago. A lost job without much of a back-up plan can lead to consumer debt, which can pile up without notice.

This type of bad fortune, coupled with necessary spending, can lead to bankruptcy in Chicago. While to some that may sound like a devastating outcome, others see the intrinsic value in the process and its outcome. But hiring an experienced Chicago Bankruptcy Lawyer is essential to navigating the complex bankruptcy codes.

The story suggests that only 24 percent of people have the recommended cushion of at least six months' expenses set aside for emergency situations. Most people aren't prepared for contingencies and another 24 percent have no emergency savings at all.

About 6.2 million people are out of work for half a year or longer and the poll results show that people are woefully unprepared for a time when job security and the economy are such concerning topics.

"The majority of Americans still have much work to do in building an adequate emergency savings cushion," Greg McBride, senior financial analyst for Bankrate told The Associated Press.

McBride said the survey's results were surprising given that so many people have seen the effects of the 2007-2009 recession and haven't planned for emergency savings. Yet, the challenges of the economy have made it difficult for people to store away money.

Respondents under 30 with annual incomes under $30,000 were most likely to report having no savings at all. Those likeliest to have six months of expenses in a fund were higher-income households and people in their 50s and 60s.

Less than half of those who participated in the poll had about three months of expenses, which was the same figure as a 2007 poll. Other findings:

• Feelings of financial security declined slightly to 97.8 in June from 98.5 in May. A reading under 100 shows how less financially secure people are feeling compared to a year ago.
• About 26 percent of those polled said they were comfortable with their debt compared to a year ago, while 19 percent say the opposite.

Let's face it -- it's much easier to build up savings when you're an executive for a Fortune 500 company, a doctor, lawyer or engineer making a six-figure salary. But most people aren't in that boat. The cost of raising children, no raises, pay cuts and the unexpected flat tire or water heater that goes out adds up and it's just difficult to keep up with bills.

Toss in a lost job, freak accident causing hospitalization or predatory lenders who slam consumers with fees and interest, and it's easy to see why people fall into debt the cannot handle.

But the collection calls can be stopped and it can be done through bankruptcy. Chapter 7 bankruptcy, by far the most popular form of filing, allows people to consolidate their debt and have it discharged, making for a fresh start financially.

Continue reading "1 out of 4 Chicago Consumers Have No Emergency Savings Plan" »

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 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" »

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" »

You might think making more phone calls would cost you more money - at least on your phone bill. But placing a few selective calls can actually help your finances, say Chicago bankruptcy attorneys.

Though they might not mention it, many common service providers are willing to negotiate a price - especially in today's economy. According to Yahoo Finance, consumers can save on everything from utilities to Internet service to that telephone bill by simply picking up the phone. Here's how it works.

Continue reading "Chicago Consumers Save Money With Phone Negotiations" »

We've all heard the classic financial advice a million times: pay down debt first, buy rather than rent, and invest as much as possible in your work's 401k.

But even the most trustworthy and time-tested tips can be wrong in the right situation - especially when it comes to debt, according to TheStreet. So how do you know what works best for you? Chicago bankruptcy attorneys have the tools to help you find out.

Continue reading "Debt Myths That Can Hurt Your Finances" »

It looks like taxpayers might already have a use for that extra money from President Obama's payroll tax cut - filling up the gas tank.

Legislators hoped that the tax cut - which gives many Americans the equivalent of a 2 percent raise by shaving the amount of paycheck withholdings for Social Security from 6.2 to 4.2 percent - would boost the economy. But with today's gas prices almost 40 cents higher per gallon than they were a year ago, it looks like the savings will be boosting the bottom line of oil companies instead, say Chicago bankruptcy attorneys.

Continue reading "Rising Gas Prices Put Financial Burden on Struggling Consumers" »

You can combat rising gas prices by carpooling, and you can counteract an expensive mortgage payment by downsizing to a smaller place. But you can't exactly fight rising food prices by not eating.

No, when the price of milk, produce, and coffee goes up due to weather and high fuel prices, we have to suck it up and pay more at the grocery store. A bigger price tag is never fun, but for the many Americans already on a tight budget because of growing debt, it can feel like the last straw. But there's good news - we still have some say over our supermarket bill, say Chicago bankruptcy attorneys.

Continue reading "How Chicago Consumers Can Fight Rising Food Prices" »

As if it isn't hard enough to afford your federal income taxes come April, now Chicago residents have to worry about a state income tax hike as well.

Illinois - like California and a handful of other states - is facing a major budget shortfall. To cover it, lawmakers agreed to raise the personal income tax from 3 percent to 5 percent, at least temporarily. On the one hand, it's probably long overdue - the state of Illinois has not raised income taxes since 1989. On the other hand, it's not the best timing for thousands of Chicago residents currently struggling with unmanageable debts.

Continue reading "How Illinois Income Tax Hike Will Affect Chicago Residents" »

If you're like most folks, you like to dream of all the things you could afford if you finally got that pay raise. But what if I told you that you've already gotten your raise - and you're blowing it?

Thanks to a tax bill signed by President Obama in December, the majority of Americans will pony up just 4.2 percent of our paychecks for Social Security instead of the typical 6.2 percent. In other words, most of us will get a paycheck boost of $1,000 on average this year. But since that amount is spread over a year's worth of paychecks, it will likely go unnoticed by many wage earners - and therefore won't be used as efficiently as it could be, say Chicago bankruptcy attorneys.

Continue reading "How Maximizing Tax Cut Can Help Taxpayers Lower Debt" »

So you're fed up with your finances and you've made a New Year's resolution to get out of debt. Making that commitment is the first step towards financial freedom, say Chicago bankruptcy attorneys. Unfortunately, it's not the only step.

Millions of Americans vow to change their lives for the better every Jan. 1, yet many of us don't follow through. So what sets the successful apart from the failures? Simple - a solid plan. If you want to make your dream of a debt-free future a reality, it helps to craft a plan that follows the "three Rs," according to CreditCards.com.

Continue reading "New Year, New Finances Part II: Keeping Your Financial New Year's Resolution" »

You've heard of spring cleaning, but did you know switching to winter cleaning can save you some money?

With just days to go until the New Year, there's still time to make some charitable donations that can increase the size of the tax refund you receive next year. If you're like most Chicago residents, you're probably feeling a little tapped out financially. But you can still deduct donations from your taxes, even if they aren't monetary.

Continue reading "Clearing the Clutter Helps Chicago Savers Get Organized for 2011" »