DebtStoppers USA Bankruptcy Blog

Georgia college students, like students across the nation, are increasingly relying on large student loans to cover the costs of university.

With tuition rising and jobs still scarce, more students are defaulting on their loans, putting their finances - and the finances of their families - at risk.

Ten years ago, Georgia covered 75 percent of the cost of educating each student. Today the state covers just 54 percent, with the rest of the cost paid by enrollees and their parents, according to a recent article in the Atlanta Journal-Constitution. And schools are spending more than ever, forcing students to pay more for education each year.

Of course, the problem isn't limited to Georgia. Some financial experts are predicting that student debt will become the next big bubble to burst following the mortgage loan crisis.

Our Atlanta bankruptcy attorneys have seen an increase in clients overwhelmed by student debt - and they're not alone. A recent survey of consumer bankruptcy attorneys found that 80 percent noticed a rise in people seeking relief from school loans.

Unfortunately, student debt can't be discharged through Atlanta bankruptcy like other types of debt.

Thanks to a U.S. bankruptcy law reform act in 2005, borrowers must now prove they have an undue hardship in order to have private student loans discharged. Essentially, you have to show you're disabled to the point that working for a living is impossible.

With the amount of national student debt ($867 billion) now exceeding the amount of national credit card debt ($704 billion), legislators such as Senate Majority Whip Richard J. Durbin (D-Ill.) are calling for new rules that would make educational debts eligible to be discharged with bankruptcy.

Meanwhile, though bankruptcy can't wipe out student loans, it may be able to relieve some symptoms of debt.

While the average student has roughly $25,000 in student loans, the average parent of college students is responsible for $34,000 in loans - and that number rises to about $50,000 over the typical 10-year loan repayment period.

As a consequence, many parents are at risk of losing their cars, their homes, and their life savings when neither they, nor their child, can pay the loans back.

Filing for bankruptcy in Atlanta can reduce or eliminate high-interest credit card debt, expensive medical bills, and other obligations. For families drowning in debt, lightening the load may make it possible to stay afloat on student loans and other necessary payments.

Continue reading "As Tuitions Rise for Georgia Students, More Young People and Their Families Suffer from Overwhelming Debt in Atlanta" »

It looks like a recent drop in Tennessee foreclosures was just a brief calm before the storm, according to The Tennessean.

In 2011, approximately 11 percent of Nashville area home sales were related to foreclosures - a one-third decrease from the previous year. Now the number is expected to rise to as high as 15 percent.

Though it's still lower than the foreclosure rate at the peak of the mortgage bust, the prolonged downward pressure on prices is sure to have a negative effect on consumer confidence, which is an important factor in economic recovery.

Foreclosures were put on hold in recent months as banks were forced to sort through the mess they created by allowing forged and robo-signed documents. Now that the $26 billion mortgage settlement has been announced, lenders are getting back to business.

With 864 bank-owned properties in 2011, the Nashville metropolitan area already has one of the highest rates of mortgage defaults, auctions and bank-owned sales in the Southeast.

The worst-hit neighborhoods are newer communities built during the height of the housing bubble and sold to buyers taking out no-money-down mortgages. By late last year, nearly 15 percent of all properties in the region were underwater, meaning homeowners owed more on their mortgages than their homes are worth.

Many homeowners were given a false sense of hope as foreclosures slowed and homes began to appreciate very slowly. Now, it looks like it will be a little longer before equity can be regained.

Homeowners fortunate enough to be able to stay current on mortgage payments won't really suffer any consequences unless they sell their homes. Unfortunately, many folks can't afford to stay and make payments on expensive mortgages.

Many homeowners have found relief through Tennessee bankruptcy. Filing for Chapter 13 bankruptcy has the ability eliminate nagging credit card debt, freeing up more money for the mortgage. In some cases, mortgages and home equity loans can be eliminated completely.

Once the Tennessee foreclosure process has begun, it can go quickly, according to the Tennessean. But bankruptcy can work quickly, too. Our Tennessee bankruptcy attorneys have stopped foreclosures from occurring just hours before homes were scheduled to be sold at auction.

There's no telling when the housing market is going to recover. But with bankruptcy, we can help your finances recover today.

Continue reading "Tennessee Bankruptcy May Help Homeowners Hit by Second Wave of Foreclosures" »

More Illinois students are being forced to take out expensive loans to pay for college, and it's putting a financial strain on their families.

A rapid increase in applications for financial aid has caused the state to run out of funds early, according to the Chicago Tribune. While 140,000 applicants are expected to receive aid, an equal number of eligible students will be turned down.

The problem isn't exclusive to Illinois. In fact, some are calling student loans the next big debt bubble.

In a recent survey, more than 80 percent of bankruptcy lawyers say they've seen an increase in clients looking for help with school loans. Our Chicago bankruptcy attorneys certainly have.

Unfortunately, bankruptcy can rarely eliminate student debts because of a 2005 bankruptcy law reform. Unlike unsecured debt such as credit card debt and medical expenses, school loans cannot be discharged unless it can be proven that the debt holder has an undue hardship - which usually translates into a disability that makes it impossible to work.

Getting out of paying private college loans is about as impossible as getting out of paying child support.

But critics say that has to change.

National student debt now totals $867 billion - more than the $704 billion Americans have in collective credit card debt.

Because parents and grandparents frequently co-sign the loans, they're often held liable, putting their homes and savings at risk. On average, parents of children with student loans are responsible for $34,000 of debt.

With tightening credit, rising tuitions, and a dismal job market, paying those loans back is no easy feat.

While filing for bankruptcy in Chicago is unlikely to eliminate student debt, it can ease the burden of other types of debt. For students or their families, bankruptcy can provide a way to organize and reduce payments for obligations such as credit card debt, medical bills, and personal loans.

Bankruptcy may provide enough breathing room to allow you and your loved ones to make mortgage payments and other important bills while also staying current on student loans.

You may still be dealing with debt, but by continuing to make important payments, at least you won't be dealing with accumulating fees and penalties, credit damage, and bill collectors.

Continue reading "Illinois Runs Out of Financial Aid for College, Increasing Student Debt in Chicago" »

Banks are supposed to protect the money we deposit in checking accounts, not rob us of it. But that's exactly what they're doing with new short-term high-interest arrangements known as advance loans.

Big banks such as U.S. Bank and Wells Fargo are increasingly promoting the loans, which are offered through direct deposit checking accounts.

Their target market is consumers who are short on money between paychecks and need a quick infusion of cash to pay the bills. In exchange for the loan, banks require the payment in full after a short period, usually 10 days to a month - plus, on average, a $10 fee for every $100 borrowed.

Sound familiar? It's essentially the same formula as the infamous payday loan, which leads many people to file for Atlanta bankruptcy every year.

Because both payday loans and advance loans require a large payment very quickly, many borrowers end up having to take out a new loan just to pay the steep fees on the first loan. Before long, every paycheck is going to the lender - and the fees keep accumulating.

But while payday loan centers typically recover their payment with a post-dated check, banks can deduct what you owe the minute your paycheck is deposited into your account. If you were planning on making your mortgage payment or covering your credit card bill with those funds, you're out of luck.

Lenders claim the loans are meant to help people in financial emergencies, but critics say banks are simply looking for new sources of revenue to make up for debit and credit card fee limitations.

As more consumers fall prey to advance loans, consumer groups say, it could make checking accounts an unsafe place for money - prompting Americans to close their accounts and rely on expensive credit cards rather than cash.

Of course, even the worst credit cards have interest rates lower than payday and advance loans. It's estimated that the average bank customer ends up stuck in the loan cycle (i.e., owing the bank) for 175 days a year, during which time they may pay a 365% APR.

Whether they stem from a credit card or a predatory loan, high interest rates are a battle that most consumers can't win on their own. When you're stuck in the damaging debt cycle, Atlanta bankruptcy can be the best tool for breaking free.

Depending on your situation, you can either make manageable payments on your debts by filing for Chapter 13 bankruptcy or have most or all of your unsecured debts discharged by filing for Chapter 7 bankruptcy.

Either way, filing for bankruptcy in Atlanta gives you - and not your bank - control over your paycheck.

Continue reading "For Consumers Pushed Into Predatory 'Advance Loans' By Big Banks, Bankruptcy May Be Best Way Out" »

Most of us would rather eat glass than knowingly sign up for a credit card with a 365% APR. Yet consumers are increasingly being tricked into loans with exactly that kind of sky-high interest rate - by their own banks, according to CNN Money.

Called advance loans, these short-term loans provide quick cash for bank customers with direct deposit checking accounts.

The arrangement is strikingly similar to that of payday loans, which are the cause for a large number of Tennessee bankruptcy filings each year.

Both payday and advance loans allow struggling consumers to pay the bills between paychecks. But because the balances and fees are due in full just two weeks to a month after the loan is established, it's common for borrowers to be unable to pay the money back.

As a result, many recipients of payday and advance loans are forced to take out an additional loan to pay off the first.

What makes the latest advance loans especially dangerous is that banks can debit the amount due directly from a person's checking account as soon as a recurring deposit - such as a paycheck - a is made.

Instead of just being unable to pay back the loan, now borrowers are also unable to pay any important bills, from the mortgage to the phone bill, because they never received their salary.

The loans have consumer protection groups crying foul. With big banks pushing predatory short-term loans, bank accounts are morphing from an important savings tool into an unsafe place for money. As a result, consumers may be encouraged to close bank accounts - and perhaps rely solely on credit cards and payday loans.

Short-term loans can result in the same vicious debt trap as credit cards, but because interest rates are much higher, consumers get into more trouble more quickly.

According to CNN Money, the average advance loan is for 10 days and charges $10 per $100 - but because the average consumer remains indebted to the bank for 175 days, the annual percentage rate can end up at more than 300 percent!

It's hard to turn down quick cash when you're living paycheck to paycheck, even when you know that the terms don't make sense. For many, bankruptcy is the only way to break the cycle.

If you're handing over every paycheck to the bank, you're essentially working for them. But as a customer, your bank should be working for you.

By allowing you to make manageable payments on unsecured debts - or discharge the debts entirely - filing for Tennessee bankruptcy can give you the foothold you need to get your finances, and your life, back on track.

Continue reading "As Banks Trap Consumers in Cycle of Advance Loans, Nashville Bankruptcy May Offer Relief" »

Payday loan companies have long been criticized for their predatory nature. Now, the nation's biggest banks are surreptitiously doing the same thing under a different name.

Lenders like Wells Fargo and U.S. Bank have begun offering advance loans through checking accounts with direct deposit.

Like payday loans, these advance loans are short-term and high-interest.

Struggling consumers take out the loans so they can pay their bills before payday. But when their paycheck finally comes in, the loan's outrageous fees can make it impossible to pay up on time - so borrowers take out another short-term loan, and soon get caught up in a cycle of debt.

In fact, this cycle is a common reason may Chicago bankruptcy attorney clients seek protection through the bankruptcy system.

But while payday loans often use a post-dated check to retrieve payment for the loan, banks have the ability to deduct their due right out of a checking account the moment a scheduled deposit, such as a paycheck, occurs.

Because customers often plan to use that deposit to pay other important bills - like mortgages, health insurance premiums, and credit card balances - they're forced to take out yet another advance loan.

A recent CNN Money article criticized the practice for eroding savings and driving bank customers to close accounts, leaving some without any bank at all. Without the security of a checking account, consumers are more likely to turn to credit cards and payday lenders.

Though lenders claim the loans are intended for emergencies, there's evidence that banks are using the income from advance loans to make up for regulatory limits on debit and credit card fees.

When you're not short on cash, it's easy to see the danger in payday loans. But as flat wages and rising prices cut into the bottom lines of more Americans, many of us are turning a blind eye to terrible terms. Short of getting a large promotion or winning the lottery, there's just one solution that makes sense: bankruptcy.

On average, fees on advance loans equate to a 365% APR. If you're having trouble paying off credit card debt with 25% interest, how can you handle a dozen times that much?

Filing for Chicago bankruptcy breaks the cycle by making payments manageable or eliminating your need to pay back the debts altogether. Either way, you'll be able to regain control of your paycheck.

Continue reading "Chicago Bankruptcy Attorneys Warn of Predatory Loans Big Banks Are Handing Out to Customers" »

For many Americans, the pain from medical debt lasts a lot longer than the pain from the illness or injury that caused it.

As a result, more Georgia residents are turning to Atlanta bankruptcy for much-needed relief.

It's already frustrating enough that healthcare costs are rising. But to make matters worse, hospitals overwhelmed by paperwork are increasingly sending bills to debt collection agencies.

As of 2010, it was estimated that 30 million Americans had been contacted by a company attempting to collect on a medical bill. However, many more may have unpaid medical debts and not even realize it.

A recent Associated Press story reports that more and more people are finding out about medical debt when they go to refinance their mortgage or take out a new loan.

In many cases, the debtors had been in the process of resolving a dispute with their insurance company - perhaps even over a billing error - without realizing the debt in question had been farmed out in the meantime.

By the time it becomes evident there's an unpaid bill on a person's credit report, the damage has already been done. Even if the bills have already been paid, the record of a collection agency can mar a credit report for years.

While many insurmountable medical bills stem from a lack of insurance, an increasing number of cases are caused by gaps in coverage. People may be properly insured, but co-pays and deductibles can still lead to bills that are difficult to pay.

Whether you can't afford your medical bills - or you can't afford the credit damage that has resulted from them - an Atlanta bankruptcy may be the most realistic solution.

Filing for bankruptcy in Atlanta has the ability to get all of your unsecured debts under control, from hospital bills to credit card debt. When overwhelming costs damage credit, bankruptcy can blaze the path consumers need to get back on track.

If you're considering bankruptcy to bounce back from medical debt, know you're not alone. It's estimated that 60 percent of bankruptcy filings are due to medical costs, according to CNN Health. In almost 80 percent of cases, filers have health insurance.

Having health care coverage isn't enough these days. For many people, bankruptcy can offer relief.

Continue reading "Credit Damage from Unpaid Medical Debt Prompts More to File for Atlanta Bankruptcy" »

There's a common stereotype that bankruptcy filers are unrestrained spenders. But statistics show that more Americans file for bankruptcy because of medical bills than credit card debt.

Hospitals and doctors are increasingly farming out patient bills to debt collection companies, according to a recent Associated Press story.

Between 2005 and 2010, the number of Americans contacted by debt collection agencies for unpaid medical debts rose from 22 million to 30 million.

Of these cases, an estimated 3.4 million Americans still have credit reports that show medical debt, even after the debt has been paid.

When your debts get kicked back to collection agencies, it automatically drops your credit score - even if you end up paying the bill.

In the AP story, a couple with seemingly good credit applied for a home loan, only to learn that a $200 bill they didn't even know about had been sent to a collection company, sinking their credit score and their chances of getting the mortgage.

CNN Health estimates that 60 percent of people who file for bankruptcy today do so because of difficulty paying medical bills. But here's the real shocker: nearly 80 percent had health insurance.

In more and more cases, unpaid medical bills stem not from lack of coverage, but from gaps in coverage such as deductibles and co-pays.

When combined with expensive mortgages and unsecured debts - such as credit card debt - small medical bills can be enough to push someone in an already precarious financial situation over the edge.

Sometimes a bill may be affordable, but it goes unpaid due to a dispute with the insurance company over a billing error or other problem. That debt can still be sent to a collection agency - and it can still drop your credit score.

Despite health care reform, the costs of medical treatment are getting more troublesome for American consumers. Tennessee bankruptcy is often the most realistic solution.

Health care is supposed to make us better, not make us sick with stress. If medical debt is causing you pain - either alone or in combination with other forms of debt - filing for bankruptcy in Tennessee may be able to provide relief.

Continue reading "Lingering Medical Bills Are Causing More Consumers to Turn to Tennessee Bankruptcy" »

Coping with health issues is undoubtedly stressful, emotionally and financially. Now it appears that doctors and hospitals are putting salt on our wounds.

Hospitals are kicking unpaid medical bills to collection agencies, wrecking patients' credit in the process, according to a recent Associated Press story. Increasingly, those filing for bankruptcy cite medical bills as the reason they're seeking protection.

It's estimated that 30 million Americans were contacted by bill collectors about medical costs in 2010. That's up from 22 million in 2005.

The problem isn't just limited to the uninsured.

It's common for large gaps in coverage to result in bills for thousands of dollars. Chronic illnesses can lead people with health insurance to lose their jobs and, thus, their coverage.

Other times, bills are considered unpaid as a result of a dispute with an insurance company, such as a billing error. In the majority of cases, these unpaid debts are for less than $250.

And paying medical debts doesn't always make the problem go away.

In one instance, a Texas couple applied for a mortgage only to learn that a $200 bill - which they had since paid - ruined their credit simply because it had been sent to a collection agency. Any debt managed by bill collectors can stay on your credit report as a blemish for years after it's paid off.

It's estimated that as many as 3.4 million Americans have medical debts lingering on their credit reports, even though the bills have been paid.

Uncle Sam is trying to ease the pain with the proposed Medical Debt Responsibility Act, a bill that would require debt collection companies to remove paid-off medical debts from credit reports within 45 days.

Even if approved, however, it's impossible to say for sure when the bill would go into effect.

All it takes is one illness to put most Americans out of the black and into the red, health insurance or not. Chicago bankruptcy provides a way to pay down overwhelming unsecured debts or, in some cases, wipe the debts completely clean.

The stress of bills alone can be enough to make you sick. Most people don't plan on filing for bankruptcy, but when injury or illness has derailed your plans, a Chicago bankruptcy filing can be a lifesaver.

Continue reading "Unpaid Medical Bills Lead Many Consumers to File for Chicago Bankruptcy" »

Residents of Atlanta and the rest of Georgia live closer to the financial edge than those residing in any other U.S. state, according to a recent study.

Corporation for Enterprise Development, a nonprofit educational organization, ranked Georgia residents as the most financially unsecure in the country, based on factors such as debt load, assets, and savings level.

However, that doesn't exactly mean that those in the Peach State are poorer than residents of other regions, say researchers. In fact, plenty of study participants were middle class consumers with well-paying jobs.

However, many are considered "liquid-asset poor," meaning they spend most or all of their monthly income and have little savings, often because of overwhelming debt.

Georgia residents frequently reported that they are just one or two paychecks away from being unable to pay their bills.

When you don't have a cash cushion to fall back on, all it takes is one misstep or instance of bad luck to send you spiraling downward into financial ruin.

Our Atlanta bankruptcy lawyers have helped many clients who were able to scrape by until the day a financial emergency struck. Without savings, they were suddenly forced to rely on credit cards and payday loans, usually with ridiculously high interest rates.

In some ways, being liquid-asset poor is almost more dangerous than living below the poverty line because middle class Americans often don't realize they're in danger - and thus don't make any preparations.

With wages flat and costs like healthcare, gas, and groceries all rising, spending your entire paycheck is just setting yourself up for trouble.

For Atlanta residents already drowning in debt, bankruptcy can be a saving grace.

If you've been put in a tight spot because of your lack of savings, Atlanta bankruptcy has the power to help you get current on your mortgage, eliminate payday loans, and get out from under the thumb of creditors - so you can bounce back from adversity no matter what.

Continue reading "Georgia Residents Living Close to the Financial Edge May Find Security with Atlanta Bankruptcy" »

As the number of underwater mortgages continues to rise, short sales have become a popular way for Chicago homeowners to avoid foreclosure without filing for bankruptcy.

Unfortunately, homeowners are finding out that a short sale can quickly go from a saving grace to a nightmare. Quite often, a Chicago bankruptcy would have provided a more successful outcome.

As the Chicago Tribune recently illustrated, many lenders are overwhelmed by the sheer volume of calls and requests they're getting from homeowners looking to refinance, get a loan modification, or complete a short sale.

As a result, banks are refusing to approve a large number of short sales - even if homeowners are qualified and buyers are already lined up.

According to the Tribune, it can take months - or even years - to get a sale approved, even for those who persistently call and e-mail their bank.

The reality is that your lender has absolutely no obligation to negotiate any sort of deal. Whether there are small errors in your paperwork or the bank believes it can get a higher price by selling the property on its own, you may be out of luck.

Even when lenders are willing to participate in a short sale, the battle isn't over yet.

Often times, properties are sold for less than the amount of the debts secured against them, leaving a collectible balance. Unless this remaining debt is formally extinguished, the note can be transferred to a collection company.

At best, a short sale simply resolves the ownership of your home, but doesn't do anything to settle debt. At worst, the process can turn your life upside-down with no guarantee of any benefit.

Many borrowers assume that seeking a short sale as an alternative to foreclosure will prevent a stain on their credit report.

However, if you've missed multiple house payments and other bills, your credit is already considerably tarnished. And just like with foreclosure, a short sale ultimately leaves you without a home - or a means of applying for a mortgage in the future.

In most cases, it's unsecured debt - not the mortgage - that's at the root of the problem. Many homeowners seeking a short sale have stopped making house payments in order to have more money to juggle other expenses.

Filing for Chapter 13 bankruptcy can provide a better solution. By getting a grip on large unsecured debts, homeowners can get current on mortgage payments, stay in their house, and - with the help of Chicago bankruptcy lawyers - eliminate debts.

Continue reading "Homeowners Struggling to Close Short Sales in Chicago May Want to Consider Bankruptcy" »

Tennessee universities are short on cash, and its students who are bailing them out.

While Tennessee funded 55 percent of public college budgets in 2002, a decade later the state is only covering 30 percent, according The Tennessean.

As a result, students are being crushed under a load of ever-increasing debt. Students at Middle Tennessee State University, for example, now have a cumulative student debt of $63 million - or $5 million more than the previous year.

Meanwhile, scholarships are increasingly more difficult to come by. For college students lucky enough to find financial aid, many programs are covering smaller percentages of expenses.

Despite threats by President Obama to withhold federal aid if colleges don't stop hiking costs, tuitions keep going up.

Typical student debts can range anywhere from $10,000 to $100,000 by graduation time.

When economic times are good, it's possible for new grads to pay the bills with an entry-level job. Unfortunately, today's economy means many graduates are working at the local coffee shop or fast-food joint rather than a corporate office.

Without a decent paycheck, it's easy for students and grads to get in the habit of relying on credit cards to cover costs while they continue to pay school loans. In fact, many young people are racking up credit card debts as high as their student debts.

Some are speculating that the rise of unmanageable student debt will be the new housing-bubble crisis.

In many cases, bankruptcy can provide relief.

Most students don't consider filing for Tennessee bankruptcy because student loans cannot typically be discharged unless they can be proven to provide an undue hardship. But bankruptcy can often help the millions of young people who have been pushed into overwhelming credit card debt because of student loans.

Filing for bankruptcy presents the ability to eliminate unsecured debts - i.e. credit card debt, medical bills, and other non-college-related burdens not secured by assets.

If you're regularly maxing out credit cards and making late payments, getting back in control of your debt can help you begin rebuilding your credit score so you can qualify for loans in the future.

College is supposed to increase our chances, not limit them. By conquering debt, you can finally transition into the real world, leaving college - and its impossible costs - far behind.

Continue reading "As State Cuts University Budgets, College Students Take Out Bigger Student Loans in Tennessee" »

It's been estimated that 18 million households in the U.S. could see an improvement in their financial situation by filing for bankruptcy, according to ConsumerAffairs.com. Yet well under 2 million actually take advantage of bankruptcy protection.

Many folks are so afraid of bankruptcy they end up missing out on the only practical solution for their debt problems.

Recently, Bankrate.com looked at the top myths that keep Atlanta residents and other Americans from finding relief. In many cases, struggling consumers fear further damaging credit, losing all their assets, and embarrassing themselves.

The sad reality is that many people who resist Atlanta bankruptcy often end up filing later anyway because they've run out of other options. By that time, their credit may be in the worst possible shape, they probably have no money left, and they may have lost their home to foreclosure.

Bankruptcy is a government-created legal proceeding to help consumers manage overwhelming debts while protecting their best interests.

Filing for bankruptcy in Atlanta won't be the solution for every family. Some consumers may be able to successfully alleviate troubles by cutting costs, getting a refinance or loan modification, or negotiating with creditors. However, these options are simply not possible for everyone.

When you're drowning in debt, bankruptcy protection can be a lifesaver. Read on for Bankrate.com's top bankruptcy myths - and the truths behind them.

You'll lose important assets

While Chapter 13 bankruptcy allows for readjustment of debt, Chapter 7 bankruptcy has the ability to eliminate many unsecured debts completely. This is why it's known as liquidation - and why many consumers fear it will require turning over their most precious personal possessions. In some cases, filers can be asked to give up assets. However, most people complete bankruptcy without losing any property at all. Each state has its own long list of exemptions - including everything from homes to retirement savings. If you're making payments on an item, you're legally allowed to keep it.

You'll wreck credit irreparably

One of the biggest reasons people avoid bankruptcy is worry about doing credit damage. Yet most people who file have a credit score that can't get much lower. It doesn't make sense to avoid bankruptcy in order to preserve credit when it may be the only action that allows you to start making the financial improvements necessary to rebuild credit.

You'll embarrass yourself

Yes, a bankruptcy filing is a public proceeding. But it's not going to be published in your local newspaper. If someone wants to find out if you've filed for bankruptcy, they'll have to either request a copy of your credit report or go to the bankruptcy court, look up your file number, and ask a clerk to view it. Unless you are a famous celebrity being investigated by a tabloid reporter, it's unlikely that someone is going to dig up details about your financial life. In many cases, bankruptcy helps keep a person's finances private by discreetly helping them get back on their feet before they suffer a foreclosure or have to resort to borrowing money from friends and family.

Continue reading "Popular Myths Preventing Many Consumers from Enjoying Financial Relief with Atlanta Bankruptcy" »

Sometimes we're our own worst enemy.

Case in point: While many Tennessee consumers are in a position to find financial relief through bankruptcy, most are too afraid to file because of unfounded fears.

According to Bankrate.com, many Americans believe filing for bankruptcy will mean losing all their assets, becoming ineligible for a credit card, and dealing with numerous other difficulties.

The article goes on to point out that most of our concerns are, in fact, untrue.

In reality, a Tennessee bankruptcy may be the most effective way for people to manage debt when other options, such as reducing expenses or negotiating a loan modification, just aren't a possibility. While bankruptcy may not be right for every situation, it can be a godsend for those who qualify.

Tennessee bankruptcy attorneys have worked with many clients who avoided filing until there was no other solution, leaving them with a rock-bottom credit score and foreclosed home. The sooner you file for bankruptcy, the sooner you can protect your house from the bank, begin repairing credit, and get back in control of your bills.

We often forget that bankruptcy was created for one reason: to help consumers. Here are Bankrate.com's top bankruptcy myths - and why they're simply not true.

Your credit will be forever tarnished

It's true that bankruptcy will remain on your credit report for up to 10 years. This concept frightens people. But considering most consumers who file have been missing payments and routinely approaching or exceeding their credit limit for years, bankruptcy probably isn't going to make that much of a difference. What bankruptcy can do, however, is allow you to make the necessary changes to start improving your credit. In fact, many bankruptcy clients receive credit card offers shortly after filing.

You'll lose your stuff

While Chapter 13 bankruptcy protects assets, Chapter 7 bankruptcy allows some items to be liquidated. This leads many people to assume they will automatically lose their personal possessions by filing for Chapter 7. In most cases, homes, cars, retirement funds, and many other items are protected by a list of exemptions determined by each state. In addition, any item that you continue making payments on will remain yours to keep.

Your filing will become public knowledge

Maybe one of the biggest deterrents for most potential bankruptcy filers is pride. They worry that somehow neighbors, co-workers, and acquaintances will find out and view them as a financial failure. While bankruptcy is a public legal proceeding, it's not like your name will be read out on the steps of the courthouse. Unless you're a famous celebrity, no one is going to find out you filed for bankruptcy. In fact, by nipping your financial problems in the bud before they cause long-lasting damage - such as the loss of your home to foreclosure - you're in a better position to privately solve your problems and move on before anyone notices.

Bankruptcy is simpler and more effective than most Americans realize. Ultimately it's your choice whether to file. By educating yourself about Tennessee bankruptcy, you'll have the information needed to make the right decision.

Continue reading "Common Misconceptions Prevent Consumers from Finding Relief with Tennessee Bankruptcy" »

For a growing number of Chicago residents, the biggest obstacle to overcoming financial struggles may be their own unfounded fears.

According to Bankrate.com, many folks hold untrue beliefs about bankruptcy that keep them from filing for protection.

Common misconceptions include the idea that bankruptcy will make it impossible to get credit, that the government will repossess all of your personal property, or that everyone in the neighborhood will know you filed for bankruptcy.

Yet filing for bankruptcy in Chicago may be the most practical - and painless - solution for people facing foreclosure or buried in credit card bills.

Depending on the type of bankruptcy for which you are eligible, bankruptcy has the ability to protect important assets, shrink large debts, and provide a fresh financial start.

Bankruptcy isn't for everyone. If you can get a handle on costs by refinancing your mortgage or tightening up your budget, it will be better for your credit - at least in the short term. But not everyone has those options. When simple measures aren't enough, a Chicago bankruptcy has the power to get debts under control so you can rebuild your finances.

Here are some of the most common bankruptcy myths - and the realities behind them - according to Bankrate.com.

Everyone will know you filed

Maybe if you're a famous actor or athlete, reporters will dig up the fact that you filed for bankruptcy. For a normal consumer, the only people who will know about your bankruptcy are your Chicago bankruptcy lawyer and your creditors. While it's possible that an employer could view your credit report and notice that you've filed, he or she would also see that you're in the process of conquering financial troubles.

You'll lose all your assets

Because Chapter 7 bankruptcy comes with the possibility of asset repossession, many people believe it's a given. This simply isn't true. States have exemptions that protect assets such as homes, cars, retirement funds, and more. If you continue making payments on an item - which should become easier with bankruptcy - you can keep that asset.

Your credit will be ruined forever

When you file for bankruptcy, your credit will take a hit initially. However, most Chicago bankruptcy attorney clients are already suffering from rock-bottom credit scores. At least bankruptcy allows you to do something about it. Just because bankruptcy remains a footnote on your credit report doesn't mean your rating will be permanently damaged. From the moment you start paying on time, keeping your credit ratio low, and making smart money moves, your credit will begin to recover.

Filing for bankruptcy is difficult

Bankruptcy isn't as complex or time-consuming as most people fear. Your primary concerns are making sure the paperwork is filled out correctly - which is why a professional bankruptcy lawyer comes in so handy - and ensuring that, if you have a payment plan, your payments are made on time. That's it.

Continue reading "Chicago Bankruptcy Myths That Keep Consumers from Finding Financial Relief" »

The more trouble you're in with your mortgage, the less likely your bank may be to help. At least, that's the idea behind the moral hazard argument banks are using to avoid assisting homeowners.

Originally an insurance term, "moral hazard" is taking on new meaning in an era of bank bailouts and help for struggling borrowers, according to the New York Times.

The term refers to the idea that people will take bigger risks if they aren't held responsible for the consequences.

Banks are claiming they have a moral obligation not to write down a principal - or even just ease loan terms - on underwater mortgages. If they do so, banks claim, it would only encourage owners who can afford their mortgages to stop paying.

So is there any truth to their theory?

Data in the Times story shows that just 10 to 15 percent of people who defaulted on their home loans were actually capable of making their mortgage payments. Even for those financially able to make payments, most are likely under major strain from credit card debt and other obligations.

While people who walked away from their homes got a lot of press, the reality is that most folks who are facing foreclosure would prefer to stay in their house. Now, filing for Chicago bankruptcy may be their best solution.

As it turns out, banks may be the ones with the morality problem. The refusal of lenders to participate in helping homeowners hurts everyone. It's speculated that underwater mortgages are holding back the economy - and that a glut of foreclosed properties are poised to drive down real estate prices even further.

For those unable to get help from big banks, filing for Chapter 13 bankruptcy may offer a way to stop foreclosure and get payments back on track.

Banks made enough of a mess when they issued bad loans, then began throwing Chicago residents out of their houses without properly reviewing those loans.

The only moral obligation you have as a homeowner is to gain back control of your finances for you and your family. Bankruptcy was created to do just that.

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It was big banks that helped homeowners get in over their heads during the height of the housing bubble. So why are lenders now claiming they have a moral obligation to not help us out?

Chalk it up to what's known as moral hazard, or the theory that people will take undue risks if not held responsible for their actions.

As the New York Times reports, lenders are claiming that implementing programs to relieve homeowners with underwater mortgages would send the wrong message. By offering better terms or reducing a person's principal, banks say they would be rewarding bad behavior - and encouraging those who can afford to make mortgage payments to default as a savings strategy.

This belief may be to blame for Fannie Mae and Freddie Mac's refusal to offer debt relief.

Though a recent $25 million mortgage settlement with large banks like Wells Fargo and Bank of America is intended to help some borrowers who were unfairly booted from their homes, government-backed Fannie and Freddie - which service roughly half of the country's mortgages - aren't participating.

But banks are failing to consider that there are plenty of incentives to keep homeowners making payments - if they can afford it, say Atlanta bankruptcy attorneys. Defaulting on a mortgage doesn't only mean losing the roof over your head. It also means hitting rock bottom financially.

A homeowner's credit takes a hit after just 30 days of delinquency. It's only downhill from there. By the time most homeowners walk away, their credit is so damaged that they have difficulty qualifying for an apartment, let alone a credit card or loan.

Though the media likes to spotlight people who walk away from a mortgage as a financial strategy, the vast majority only leave when they believe they have no choice.

But they do have a choice: bankruptcy. If banks refuse to help you out, it's still possible to help yourself out. Filing for Chapter 13 bankruptcy in Atlanta provides a way to stop foreclosure and gives homeowners time to get payments back on track.

Meanwhile, an Atlanta bankruptcy has the power to reduce or eliminate credit card debt, medical bills, and other forms of unsecured debts. For many homeowners, relief from other financial burdens can make paying the mortgage possible.

Banks may not have a consumer's best interest in mind, but bankruptcy does. In fact, bankruptcy law was created specifically to make it possible for a consumer to affordably meet obligations and enjoy a fresh start.

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Banks are increasingly playing the moral hazard card to avoid helping troubled homeowners, according to the New York Times.

Despite being accused of some moral oversights of their own (robo-signing, anyone?) lenders are now claiming that, by taking steps such as reducing the principal on an underwater mortgage, they would be encouraging more borrowers to behave badly.

The concept of moral hazard first came into the national spotlight in 2008, when ordinary American consumers began to question why we should help bail out the banks that sent our economy into a tailspin in the first place.

Now those banks are using the same argument to avoid bailing us out of the problems they created.

Lenders say that helping homeowners who default will only encourage others - many of whom can actually afford to pay their mortgage - to default as well in order to take advantage of better terms.

Yet the data shows otherwise, say Tennessee bankruptcy lawyers. It turns out that 10 to 15 percent of homeowners who default could have actually continued paying their mortgage. That leaves up to 90 percent who had no other choice.

Banks aren't taking into account the consequences that homeowners would suffer by submitting to foreclosure or walking away from a mortgage.

In addition to losing a place to call home - and any equity in it - homeowners are also left with tarnished credit. Poor credit can make it difficult to find a rental, qualify for future loans, and even get hired for a job.

Most homeowners in Tennessee and beyond default because they think they have no other option. In reality, they do have an option: bankruptcy.

Filing for Chapter 13 bankruptcy in Tennessee is the only surefire way to stop foreclosure and give yourself a chance to catch up, whether you've missed your first payment or are already on the path to eviction.

Banks may not give you the time of day, but Tennessee bankruptcy law was created to protect the consumer. And there's never been a time when consumers needed more protection than today.

By allowing consumers to eliminate unsecured debts like credit card debt, more money is freed up for making house payments and other important bills.

Bankruptcy allows consumers to do the right thing - i.e., making good on their mortgage - while also relieving the burden of debt. Best of all, you don't need to go through your bank to make it happen.

Continue reading "Banks Cite Moral Reasons for Refusing to Help Homeowners with Underwater Mortgages in Tennessee" »