DebtStoppers USA Bankruptcy Blog

Usually employment and the housing market follow one another. Not in Atlanta, however.

The good news is that, after increasing between 2007 and 2010, Atlanta unemployment is finally starting to ease. The rate has been falling steadily for seven months and has decreased nearly a full percentage point - to 9 percent - over the past year, according to the Atlanta Journal-Constitution.

Typically an increase in employment would be accompanied by an increase in housing prices. Yet the average sales price of an Atlanta area home was down 2.1 percent since the start of 2012.

Atlanta home values are currently at the lowest level since 1997. Meanwhile, market analysts are predicting values will continue to decrease this year.

As was recently reported in our Atlanta Bankruptcy Attorney Blog, banks have finally gotten back to processing foreclosures now that a settlement has been reached between U.S. states and the nation's five largest lenders. In metro Atlanta, foreclosed properties make up at least one-third of home sales.

Just because consumers have more money in their pockets doesn't mean they'll immediately be able to afford pricey mortgage payments.

Experts predict that, when the housing market does start to recover, the process will be slow. With damaged credit, uneven job histories, and little in the way of savings, most consumers will be hesitant to move into the home buying market.

Meanwhile, those who already have homes are still struggling to keep them.
Often times, it's credit card debt - not house payments - that makes paying the bills most difficult. For underwater borrowers who are delinquent or at risk of becoming delinquent, Atlanta bankruptcy can be a saving grace.

Those with steady incomes may qualify for Chapter 13 bankruptcy, which provides the freedom to prevent or stop foreclosure and reorganize many types of debt into a single repayment plan.

With the house protected and debt under control, homeowners can begin rebuilding credit and regaining control over finances.

The job market in Atlanta is finally breathing a sigh of relief. With bankruptcy, Atlanta homeowners may be able to do the same.

Continue reading "As Housing Prices Stay Low Despite Increase in Jobs, Atlanta Bankruptcy Remains an Option for Consumers" »

In the past, Americans have tended to put their tax refunds toward family vacations, new cell phones, and other fun indulgences.

This year, however, many cash-strapped consumers are spending their checks from Uncle Sam on something a little less frivolous - but potentially more rewarding in the long-run.

More than 200,000 Americans hope to apply their refunds toward a bankruptcy filing, according to the National Bureau of Economic Research.

Personal bankruptcy filings typically rise around the time when refunds get mailed out, but the surge should be even more pronounced in 2012, reports The Tennessean.

While Tennessee bankruptcy usually pays for itself many times over by helping consumers reduce all-consuming debts, it has become significantly more expensive since 2005, when U.S. bankruptcy laws were made more complex in order to prevent bankruptcy abuse.

As a result, many of the people who stand to benefit most from bankruptcy - such as families at high risk of foreclosure and swamped in credit card debt - tend to put off filing while they wait for an infusion of cash. Meanwhile, their debts grow larger and unpaid bills pile up.

Some argue that, rather than prevent bankruptcy abuse, the new laws have just made it more difficult for those most in need of help to receive relief.

With the average tax refund expected to be approximately $3,000 in 2012, many families will have more than enough to file for bankruptcy in Tennessee.

Obviously, consumers who can afford to pay down debt with their refund won't need to file. However, many of us have debts that have spiraled completely beyond our control.

Whether it's due to overwhelming credit card debt or massive medical bills, it can be almost impossible to catch back up when you've missed numerous payments and put your credit score through the ringer.

It may be hard to commit to covering bankruptcy costs when other bills need paying, but only bankruptcy has the ability to pay off for years to come. For many folks, bankruptcy has the power to stop foreclosure and either reorganize debts into manageable payments or discharge them entirely.

Filing for bankruptcy may not be as fun as putting your refund toward a family vacation, especially when you've been scrimping and saving for months and are in desperate need of a splurge. But bankruptcy can put you on the path to financial recovery so that one day you'll hopefully be able to enjoy life's little indulgences - without the guilt of having too much debt.

Continue reading "Rising Number of Consumers Plan to Put Tax Refund toward a Tennessee Bankruptcy Filing" »

With consumer debt on the rise, a growing number of Chicago residents are falling victim to debt settlement scams.

Last week, CBS Chicago reported that the Illinois Attorney General is suing a debt collection company, PN Financial, for ripping off nearly 50 residents.

In one case, the company offered to settle a Chicago woman's credit card debts for 50 cents on the dollar, but instead pocketed $1,800 of the victim's money, leaving her even further in the hole. Similar cases of debt collection, debt settlement, and debt consolidation scams been reported nationwide.

Of course, even when debt settlement firms are legitimate, they rarely produce the results that consumers expect.

These companies often lure in consumers who are hoping to avoid bankruptcy by promising to negotiate with creditors to reduce a balance or structure repayments. Meanwhile, they instruct customers to stop paying creditors, instead putting money into an account controlled by the debt relief firm.

The problem is that missed payments result in delinquencies that damage credit history and trigger harassment from bill collectors.

Debt settlement companies may not be in a hurry to negotiate, especially if they have other customers in line. If you have multiple credit cards or other sources of debt, the company may be able to work out a plan with one, but not others.

Sadly, many consumers who had hoped to avoid bankruptcy end up filing for Chicago bankruptcy protection anyway - but by that time, their credit has already been decimated and any hope of negotiating with creditors ruined.

While bankruptcy - like a delinquency - will show up on your credit report, it's a one-time event. And unlike other dings to your credit, only bankruptcy helps you move toward a better future.

When paying off debts is not a possibility, a debt settlement company is unlikely to make a difference. By providing a way for consumers to lower or eliminate debt, bankruptcy offers a real solution and makes it possible for consumers to start rebuilding credit - and their lives.

Continue reading "For Consumers Scammed by Debt Settlement Companies, Chicago Bankruptcy Offers Realistic Alternative " »

Losing a house to foreclosure isn't easy for a homeowner - but it may be even harder on the homeowner's children.

USA Today reports that 2.3 million kids have been forced from their homes since the foreclosure crisis began in 2007.

Another 3 million live in houses that are already in the foreclosure process or are at serious risk of foreclosure due to delinquent payments. As our Chicago Bankruptcy Lawyer Blog recently reported, a new wave of foreclosures - perhaps the biggest yet - is poised to hit the market later this year.

The damage goes deeper than simply losing a roof over one's head.

Studies show that when kids are forced to move during the school year, their reading and math scores decline significantly. Because such a large transition can be challenging socially as well as academically, older kids may be more likely to drop out of school.

Children are also affected by their family's reaction to the stress of foreclosure.

An analysis on MSNBC.com suggests that people under serious financial stress may be less attentive as parents. Money problems can wreak havoc on marriages, and children often suffer the fallout.

Families thrive on stability. While it's impossible to ensure a perfectly stable environment when prices, wages, and job security are always changing, maintaining a home can give a child a sense of security amid all the unknowns. For many families, filing for Chicago bankruptcy makes it feasible.

Chapter 13 bankruptcy can give consumers the power to legally stop foreclosure.

Often times, it's not the mortgage alone that's the problem. Credit card bills, payday loans and other obligations demand money that could be going to pay the mortgage.

By halting the foreclosure process, bankruptcy allows consumers with steady incomes the time to work out a reasonable repayment plan for overwhelming debt. As long as homeowners make timely payments, any remaining debt is usually discharged at the end of the repayment period.

Every family's financial situation is different. If you're in danger of losing your home, a Chicago bankruptcy lawyer can help you understand your options.

Continue reading "Children of Homeowners Are Unseen Victims of Foreclosures in Chicago" »

As many as 8 million children in the U.S. may be directly affected by foreclosure, according to startling new data reported in USA Today.

Since the foreclosure fiasco began in 2007, an estimated 2.3 million kids have lost their homes to a bank. An additional 3 million children face the same fate because their parents are either already in the foreclosure process or are at risk of foreclosure due to missed payments.

As our Tennessee Bankruptcy Lawyers Blog reported earlier this month, a new flood of foreclosures is expected to wash over the market later this year.

While moving is never easy on kids, foreclosure in particular can have devastating effects because it impacts kids physically, mentally, and emotionally.

As data by the advocacy group First Focus illustrates, children who change schools as a result of a move can see their reading and math scores fall by as much as if they had missed a full month of classes. Kids who move frequently are also 50 percent more likely to drop out of school before graduating.

Because foreclosure is typically the result of serious financial distress, many children of families facing foreclosure suffer health problems since parents are often without health insurance.

Foreclosure frequently leads to depression, anxiety, and relationship trouble in parents, which in turn impacts children.

Children do best in stable environment where they have a sense of security. Losing the roof over their head - and seeing their parents stressed out from the process - challenges all that.

These days, it's impossible to guarantee a stable financial environment. But parents who can manage to hold onto their home might be better able to help insulate their children from economic problems. Filing for Tennessee bankruptcy may make it possible.

Chapter 13 bankruptcy protection has the power to halt foreclosure proceedings and debt collection, giving families time to reorganize debts into a realistic repayment plan. Debt remaining at the end of a 3-5 year repayment period can often be discharged completely.

If foreclosure or other financial issues are threatening the health and happiness of your family, a Tennessee bankruptcy lawyer can help determine if filing can offer much-needed relief.

Continue reading "Children of Homeowners May Suffer Most in Tennessee Foreclosures" »

New data suggests that as many as one in every 10 children in the U.S. has been or will be affected by the current foreclosure crisis. In hard-hit housing regions like Atlanta, the effects could be even more far-reaching.

According to USA Today, an estimated 2.3 million kids were residents in homes lost to foreclosure - and another 3 million are on the path to foreclosure because their parents are delinquent on payments.

The data was taken from home loans made between 2004 and 2008. Because it doesn't take into account mortgages made outside that time frame, actual numbers are likely to be even higher.

While the media tends to focus on struggling homeowners, the children of homeowners often have it even harder. Stability and security are important factors in a child's emotional well-being, and foreclosure disrupts that, according to the article.

Kids who move as a result of foreclosure suffer a drop in reading and math scores equivalent to declines seen by children who miss a month of classes. Students who move frequently are twice as likely to drop out before graduation.

Back in 2008, USA Today took a look at the toll losing a home can take on kids and teens.

Children of distressed homeowners may be more likely to exhibit behavioral problems, experience feelings of anxiety and shame, and suffer from health problems due to a lack of health insurance.

In addition, many children are also affected by their parents' emotional struggles. Foreclosure is a leading contributor to depression and divorce.

Often times, financial struggles are out of our control. Unfortunately, they can have a lasting effect on the livelihoods of our children. Many families are managing to maintain a stable home for their kids by filing for Atlanta bankruptcy.

Chapter 13 has the ability to legally stop foreclosure proceedings and other collection activities, providing families with much-needed time to reorganize debt. After a successful repayment period, remaining debts can often be eliminated.

In March, our Atlanta Bankruptcy Attorney Blog reported that more residents in Georgia are living close to the financial edge than those in any other U.S. state. If financial troubles and potential foreclosure are threatening the well-being of your family, an Atlanta bankruptcy lawyer can help determine if bankruptcy protection is an option.

Continue reading "Families with Children May Be Biggest Victims of Foreclosure in Atlanta" »

It looks like the situation will get a bit worse for underwater borrowers before it gets better.

Following the recent approval of the $26 billion mortgage settlement, the real estate community is predicting a flood of foreclosures to hit the market this summer.
As a result, already-low home values are expected to fall by 3.7 percent by the end of 2012, according to CNN Money.

The settlement, made between U.S. states and the country's largest five mortgage lenders, sets forth new guidelines for banks to use when repossessing properties.

Lenders had previously put foreclosures on hold while their processes were investigated following the robo-signing scandal that broke in late 2010.

During this time, thousands of delinquent homeowners were allowed to continue living in their houses without making mortgage payments, as the average time it took a bank to foreclose on a property stretched to 370 days - and even longer in some states.

According to the article, up to a million foreclosures that could have been pursued last year were put on the shelf.

Now it looks like those days are over. In states where court scrutiny is required for home repossession, foreclosures are already up 10 percent in the first quarter.

Financial experts believe banks will move as quickly as possible to get the initial price drop over with so that the market can hopefully return to normalcy.

Struggling homeowners hoping the bank wouldn't notice a missed mortgage payment - or several - are out of luck. Fortunately, they aren't out of options.

Filing for Chapter 13 bankruptcy in Atlanta remains an often-overlooked but valuable way to protect a property and make mortgage payments - and other forms of debt - manageable.

Not only will avoiding payments eventually lead to foreclosure, but it will also cause damaged credit and a whole lot of stress.

With Atlanta bankruptcy, borrowers can put a stop to overwhelming debt with legal protection and a realistic repayment plan. The result is a chance to get out of debt and stay in your home.

Continue reading "As Housing Market Prepares for Post-Settlement Foreclosure Surge, Homeowners Turn to Atlanta Bankruptcy" »

It looks like the days of a homeowner staying in a house for months - or years - after ceasing mortgage payments are coming to a close.

Now that a $26 billion settlement with five major mortgage lenders has been approved, banks are ready to get back to the business of repossessing homes, according to a report by CNN Money.

Millions of foreclosures had previously been on hold while banks revised their repossession policies following the 2010 robo-signing scandal, in which lenders are accused of allowing employees to sign off on numerous foreclosures without proper documentation.

As a result, a large number of delinquent homeowners were permitted to stay in their houses long after they'd made their last payments. The average foreclosure timeline in the U.S. stretched to over a year - and as long as 861 days in Florida and 1,000-plus days in New York.

Not any longer. In states where court scrutiny is required for banks to repossess properties, foreclosures are already on the rise.

Already-low home values, artificially buoyed by the withheld foreclosures, are expected to fall 3.7 percent before the year is out.

Experts believe banks will be in a hurry to push all the foreclosures through at once in order to get the initial market shock over with quickly, so the market can (hopefully) begin to rebound.

For underwater homeowners hoping to find relief, the increased foreclosure activity may seem to come as a blow. In fact, it could be viewed as a wakeup call.

When homeowners stop making payments but don't take steps to find a solution, the end result will always be foreclosure - whether it takes two months or two years for it to happen. But with a longer process, borrowers' credit scores spend more time taking a beating.

A foreclosure isn't an easy way out; it's a stressful, expensive, and drawn-out experience that also ends with your house (and any equity) being stripped away.

When banks act quickly, homeowners must act quickly. Chapter 13 bankruptcy has the power to stop foreclosure while mortgage holders work out a repayment plan for late payments and overwhelming debt.

By filing for Tennessee bankruptcy, homeowners can stop waiting for the other shoe to drop and start taking back control of their finances and their freedom.

Continue reading "Tennessee Bankruptcy Protects Underwater Homeowners from Expected Flood of Foreclosures" »

With the $26 billion settlement between states and the country's largest lenders approved, a wave of foreclosures is predicted to wash over the market.

As a result, home values will likely continue falling, driving some underwater homeowners to file for Chapter 13 bankruptcy in Chicago.

Banks had been holding on to many delinquent properties since late 2010, according to CNN Money. That's when mortgage lenders began rethinking their foreclosure processes after falling under suspicion of robo-signing, a practice in which bank employees allegedly signed off on numerous foreclosure documents without proper verification.

While banks waited, some folks were able to continue living in their homes for months - or years - after they had stopped making mortgage payments.

On average, it now takes a bank 370 days to repossess a delinquent property. In some states, it takes even longer - for instance, Florida homeowners are in foreclosure limbo for an average of 861 days.

But though a stalled foreclosure may sound like a way for distressed homeowners to buy time, it's actually bad news.

Not surprisingly, many borrowers now suffer from years of damaged credit and limited savings that will translate into difficulty securing financing - or a rental property - once they're booted from their home.

Delayed foreclosures have affected all homeowners by keeping real estate prices artificially high. According to the article, new foreclosures could push already-low prices down by another 3.7 percent this year.

Optimistic market experts believe the flood will finally lead prices to bottom out and, eventually, encourage home buyers to take action.

Meanwhile, Chicago bankruptcy remains a valid option for the many homeowners hoping to avoid foreclosure and rebuild credit.

With banks poised to pursue foreclosures more aggressively, mortgage holders need a solution they can count on. Filing for bankruptcy has the power to stop foreclosure and allow consumers to restart their lives.

Continue reading "Homeowners Hurt by Flood of Foreclosures May Find Relief with Chicago Bankruptcy " »

If you live in a minority neighborhood, it appears that banks may not deem it worth their while to clean up foreclosed properties in the area.

A recent study by the National Fair Housing Alliance uncovered what appears to be blatant racial discrimination on the part of big banks.

Foreclosed homes in several major U.S. cities - including Atlanta - were more likely to be maintained and marketed by banks if they were in predominately white neighborhoods than if they were located in neighborhoods where the majority of residents were black or Latino.

In Atlanta, it was discovered that bank-owned homes in black neighborhoods were 4.65 times more likely to be missing a "for sale" sign than in white neighborhoods. Nationally, homes in black neighborhoods were more than 80 percent more likely to have boarded up windows or doors.

Because abandoned properties with overgrown yards tend to drag down the value of neighboring homes, banks may be contributing to lower property values in minority neighborhoods.

When those homes do sell, those that have been kept-up poorly are more likely to go to investors than to families, putting further downward pressure on the values of nearby homes and limiting the number of affordable houses for people looking to buy.

First banks pushed unsustainable loans on minority communities. Then they refused to offer loan modifications or mortgage refinances. Now they're failing to do their part to care for properties lost as a result of those loans.

For those hurt by declining property values, bankruptcy often provides the relief that banks can't. Filing for Chapter 13 bankruptcy in Atlanta can restructure debts and unpaid bills into affordable payments over a period of 3 to 5 years.

Many Atlanta homeowners feel trapped because they owe more on their home than its current value. Just because selling or refinancing aren't possible doesn't mean that foreclosure is your only option.

Foreclosure doesn't have to be inevitable. Bankruptcy was created to protect consumers. An Atlanta bankruptcy lawyer can evaluate your financial situation to determine if bankruptcy can reduce your debts and save your home from foreclosure.

Continue reading "Study Shows Banks Discriminate Against Minority Neighborhoods When Maintaining Foreclosed Homes in Atlanta" »

Chicago suffers from one of the most fragile housing markets in the U.S, according to a report by the Treasury Department.

As much as 35 percent of all sales in the Windy City involve distressed properties, a statistic significantly higher than the national average. To make matters worse, sales of foreclosures are exerting downward pressure on the prices of neighboring homes.

It's been estimated that nearly half of all Chicago mortgages are underwater, a situation in which homeowners owe more on their loan than their home is worth.

Another factor that makes Chicago unique is the time it takes to process those foreclosures. While it takes most homes in the U.S. 348 days to move through the foreclosure pipeline, Chicago homes take an average of 575 days.

That's bad news for everyone. For most homeowners, a longer foreclosure process doesn't buy more time; it only puts off the inevitable, taking a greater financial and emotional toll on property owners as the bank works to take their home.

For nearby homeowners, long foreclosure processes mean more vacant properties in the neighborhood - and more eroded home value.

The report was accompanied by data from the Home Affordable Mortgage Program. Of the 1.8 million who had been offered trial loan modifications in the program - just a small portion of those who need help, mind you - just over half received a permanent modification.

What about those who didn't qualify - or the many who weren't eligible to apply in the first place?

For many underwater homeowners, filing for bankruptcy in Chicago is the most realistic way to escape a seemingly hopeless situation.

If you have negative equity on a first or second mortgage, Chapter 13 bankruptcy grants the ability to restructure overwhelming debts and late payments over a period of 3-5 years. As long as you can make timely payments, you can keep your house.

Not everyone qualifies for a mortgage refinance or loan modification, especially when busy and disorganized banks refuse to work with homeowners. But with Chicago bankruptcy, everyone can be given a fair chance.

Continue reading "Chicago Bankruptcy Proves Valuable for Struggling Homeowners in City's Fragile Housing Market" »

There's good and bad news for Tennessee homeowners. Homes sales are picking up - but prices aren't, reports The Tennessean.

Compared to a year ago, sales of Middle Tennessee homes rose by 17 percent in March and 24 percent for the entire first quarter, according to the Greater Nashville Association of Realtors.

Some homes received multiple offers, resulting in bidding wars. Homes are also turning over more quickly. With less time spent lingering on the market, foreclosed properties may be less likely to have a negative impact on the values of neighboring houses.

But while prices were shown to rise slightly for some areas, they declined for others.

One realtor noted that today's prices are about equivalent to what we saw in 2002 - a full decade ago.

While quicker turnover helps home values, the sale of foreclosed homes still affects the values of other houses in the neighborhood.

Meanwhile, obtaining a mortgage remains a challenge for potential home buyers who have damaged credit due to overwhelming debt and missed payments.

For many hurt by today's real estate values, Tennessee bankruptcy may offer relief.

Bankruptcy was created with the sole purpose of assisting struggling consumers.

For folks with underwater mortgages, filing for Chapter 13 bankruptcy can provide an affordable payment plan for unsecured debts and late payments. So long as payments are made on time over the designated 3-5 year period, you can keep you home.

If carrying too much debt is keeping you from qualifying for fair interest rates - or from being able to qualify for a loan or credit card, period - a bankruptcy filing may be able to reduce other obligations so you can begin reducing your debt balance and making timely payments, both moves that will eventually lead to improved credit.

When you've exhausted other options, finding relief through bankruptcy in Tennessee can be a breath of fresh air - and a fresh start for your finances.

Continue reading "Local Home Sales Rebound, but Tennessee Foreclosures Continue to Drag Down Property Prices" »

Our debt problems are beginning earlier and earlier.

As recent news stories have illustrated, American students collectively hold one trillion dollars in student loan debt. In addition to school loans, most recent graduates leave school with the burden of credit card debt and car loans.

While this is bad news for young adults, it's also bad news for parents and grandparents.

Because few lenders are willing to take a risk on teens and 20-somethings with little credit history, adult relatives frequently co-sign credit cards and loans for young adults.

While co-signing is one way to help your child establish credit, it can backfire if your son or daughter can't make payments. In fact, co-signed loans are one reason that more Georgia residents are seeking protection through Atlanta bankruptcy.

A recent Business Insider articles estimates that three out of four borrowers defaults on loans, leaving the co-signers liable.

It's not that today's youth are especially irresponsible; it's just that, in today's economic climate, it's impossible to guarantee a young adult will have the income to make pricey payments. Tuition and the cost-of-living are skyrocketing, while jobs for students and new grads remain scarce.

If circumstances prevent the primary borrower from paying back the loan, the co-signer becomes responsible. As a result, lenders can go after your house, car, and life's savings. Meanwhile, the good credit you worked your entire life to build can quickly disappear. Your child will also suffer from a lowered credit score, but you'll be the one pursued by bill collectors.

Bailing out our children does nothing to teach them about managing money. In many cases, a more realistic solution is to lend a loved one money directly (if you can afford it, of course), reducing the need for an outside lender - and reducing the risk of credit damage and liability in the instance of a default.

For young adults over their head in credit card debt, filing for bankruptcy in Atlanta can offer a chance to start over on the right foot. Chapter 13 bankruptcy protection can reorganize debt with a payment plan, preventing default and protecting the co-signer.

Student debt poses a challenge because it is not eligible for release with bankruptcy. However, because bankruptcy can reduce other forms of debt, it may be able to free up funds for making school loan payments.

Young adults must often make financial mistakes to learn how credit really works. However, as adults, we shouldn't be paying for our kids' mistakes. If you're burdened by debt, whether it's someone else's or your own, Atlanta bankruptcy may provide relief.

Continue reading "Co-Signing Parents Left with Credit Damage and Debt Turn to Atlanta Bankruptcy" »

Most parents would do anything to help their kids succeed. But by co-signing loans for young adults, many families are unintentionally making things more difficult.

Despite everything Americans have learned in recent years about having too much debt, we are putting our kids under immense pressure to borrow money.

With tuition rising rapidly, most students don't believe they can achieve an education without taking out student loans. With the cost-of-living high and the number of job positions low, young adults are making ends meet with credit cards. And when it comes time to buy a car or home, many young people can't gain approval without assistance.

As a result, more students are asking for help from moms, dads, grandmas, grandpas, aunts, and uncles, say Tennessee bankruptcy lawyers. By co-signing loans, these adults believe they can help their young relatives attain financing and establish a credit history.

But the benefits of borrowing are quickly erased when the primary borrower - the person you co-signed for - cannot afford to pay back the money.

According to a recent Business Insider story, as many as three-quarters of all co-signers are left to foot the bill after the primary borrower fails to make payments. Many must file for Tennessee bankruptcy in order to regain control over finances.

Not all young people who default on loans are recklessly irresponsible. In fact, many are intelligent and motivated young adults who simply haven't been able to achieve the income necessary to keep up with their bills in today's economy.

When your name is attached to their credit card debt or loan, you are liable for making any payments they cannot afford. In the case of a default, your credit score, home, and life savings will be at risk. In fact, a growing number of parents are facing foreclosure as a result of providing financial help to their children.

Not only can co-signing loans have negative consequences for parents, but it also causes trouble for young borrowers.

Many young people learn to use credit before they learn to use cash, making it impossible to understand important concepts such as budgeting and saving.

With poor credit scores from the get-go, young adults are unable to qualify for loans or forced to accept ridiculously high interest rates.

If you can afford to part with the money, making a personal loan is a lower-risk option because, unlike with co-signing, a default won't be reflected on your credit score. If the damage has already been done and you're suffering the consequences of a co-signing gone bad, bankruptcy may be able to help.

Chapter 13 bankruptcy can allow the primary borrower to make payments over a period of time, preventing default and protecting the co-signer. If lenders agree to release you from liability, you may be able to file for bankruptcy yourself.

While Tennessee bankruptcy can't be used to discharge student loans, it can free up money by reducing or eliminating credit card debt and other unsecured debts.

Continue reading "Parents Who Co-Sign for Kids May Be Stuck With Credit Damage, Tennessee Bankruptcy" »

By the way the media spins it, you'd think borrowing money is essential to success. Perhaps this is why, despite difficult economic times, many parents are lining up to co-sign credit cards, student loans, and mortgages for their kids.

But while parents have the best of intentions, they may be doing more harm than good for their families. Many co-signers end up filing for Chicago bankruptcy in order to get their finances back on track.

There's a reason banks require co-signers for people without much credit history: they're high risk. There's no way for a lender to gauge how likely a young borrower is to make good on their payment promises.

According to Business Insider, three out of every four primary borrowers default on their co-signed loan.

The person you are co-signing for may be responsible and motivated, but that doesn't guarantee they will have the financial means to make payments, particularly with today's job market.

When you co-sign, you're not only vouching for the primary borrower, but you're also putting your personal finances on the line. If your child, grandchild, niece, or nephew doesn't pay up, the default will impact your credit score - and thus your ability to qualify for future loans.

When bill collectors come after the remainder of the loan, it is the co-signer who will be on the hook.

As a result, many adults today are facing foreclosure and rock-bottom credit after decades of staying financially afloat. Because the primary borrowers' credit scores will also be affected, many young borrowers are forced to start their adult life on the wrong financial foot. There are success stories, of course - but in many cases, co-signed loans are a lose-lose proposition.

If your finances have been pulled underwater by a family member you co-signed for, bankruptcy may be your most realistic recourse.

By filing for Chapter 13 bankruptcy, young adults can avoid defaulting on credit card debts by making arranged payments, preventing creditors from going after the co-signer (you). Filing for bankruptcy as the co-signer is a bit more complicated. First, the loan must be restructured to release you from liability.

While Chicago bankruptcy protection is not usually applicable to student loans, reducing other unsecured debts such as credit card balances through bankruptcy may provide relief.

Continue reading "Parents Who Co-Sign for Kids Often End Up Bearing Burden of Debt in Chicago" »

While fewer homeowners are behind on their mortgage payments, the number in default is still well above average, reports the New York Times.

By the end of 2011, one in every eight U.S. homeowners was either in trouble with their mortgage or already in foreclosure.

People tend to miss their first payment deadline due to an unexpected financial pinch, such as a costly car repair or temporary unemployment. Most of us believe that once we recover, we'll be able to get right back on track.

Unfortunately, many homeowners forget to factor in the fees and credit damage that come with that single late payment.

The NY Times article attempts to explain the importance of payment deadlines - and how missing those deadlines hurt your chances of ultimately keeping your home.

The Grace Period

Many of us have heard of a lender's grace period, but don't quite understand how it works. Technically, a house payment is usually due on the first of the month - but some lenders allow a 15-day grace period. The catch is that lenders are super strict about when this period ends.

If your check is received a day after the 15th, you could be charged a late fee of up to 5 percent of your payment. That means that next month you'll owe two full payments, plus the penalty. It doesn't take long to understand how one late payment can put a borrower on a downward spiral to delinquency.

Effect on Credit

Many homeowners who are in financial trouble avoid seeking help from Chicago bankruptcy because they worry about the effect a bankruptcy filing will have on their score.

What they don't realize is that their credit score may already be tarnished from late mortgage payments - and bankruptcy may be the only way to get back on track.

If you are 30 days late on a payment, your lender sends a report to credit bureaus, which results in a mark on your credit score that will remain for 7 years. It doesn't matter how clean your record was prior to your tardy payment - or how quickly you rebound afterward.

A single late payment can drop your score by 100 points or more, and your number will continue to decline until you hand over the money. The more late payments, the worse your credit record.

While bankruptcy will also appear on your credit report, filing for Chapter 13 has the ability to improve your financial situation so that you can stay current on future payments.

Avoiding Foreclosure

According to the Times article, people who can resolve their tardy payments between 90 and 120 days' delinquency have the best shot at avoiding foreclosure. Unfortunately, when that many late fees have accumulated, it can be extremely difficult to recover the ability to make payments.

The best way to pull your family out of a financial hole is to avoid falling into the downward spiral in the first place. Filing for Chicago bankruptcy may be your best chance.

Continue reading "Chicago Bankruptcy Can Assist Illinois Homeowners Who Have Fallen Behind on Mortgage Payments" »

The good news is that the rate of new mortgage delinquencies has slowed. The bad news is that many Tennessee residents are still behind on their house payments.

Just over 7.5 percent of Americans were delinquent at the end of 2011, down from 10 percent in 2010. However, that still adds up to a lot of missed mortgage payments. In all, 12.63 percent - or one in every eight borrowers - is either delinquent or in danger of becoming delinquent.

In Tennessee, where foreclosures are expected to rise rapidly in the months following the massive bank settlement, it's likely that dropping real estate values could lead to additional late payments.

For many, making a late payment is the first step down a path that leads to serious financial distress - and in some cases, foreclosure.

As the New York Times recently pointed out, many borrowers who miss a payment because of an unexpected expense or income loss end up trapped in a cycle of growing penalties and fees that can make it nearly impossible to get back on track.

Understanding mortgage payment deadlines can be the difference between a one-time late payment - or the beginning of the end.

Payment Deadlines

Mortgage payments are usually due on the first day of each month, but many lenders allow borrowers a 15-day grace period. Making a payment a few days late is risky, but if you can get organized so that it's a one-time occurrence, it probably won't have lasting results.

However, homeowners who are repeatedly late are more likely to get lazy and overshoot the grace period - and this is when you'll start to see serious consequences.

If your check arrives after the cut-off time on the 15th day of the month, you're going to be looking at a late fee of up to 5 percent, depending on your lender. If you're 20 days late, you now owe your original payment, a 5 percent fee, and, in just 10 days, the next month's payment. It doesn't take long for homeowners to get overwhelmed and fall behind for good.

Credit Damage

Once it's been 30 days past your due date, your lender reports your delinquency to credit bureaus, which place the information on your credit report. Each late payment remains as a mark on your report for 7 years.

Additionally, your late payment wreaks havoc on your credit score. A single missed deadline can drop your number by 100 points, and your score will continue to drop as time goes by without payment.

Many people avoid seeking bankruptcy protection because they fear filing for Tennessee bankruptcy will wreck their credit score. However, bankruptcy is often the only solution for getting current on mortgage payments, which is necessary to stop credit damage.

The sooner you get back in the habit of making on-time payments, the sooner you can begin rebuilding your credit.

Foreclosure Risk

Once you pass the 120-day mark, the bank can begin foreclosure proceedings. However, homeowners should avoid getting anywhere close to this timeline.

Studies show that borrowers who can get their act together within 30 days have the best chance of recovery. Longer than that, and the fees and penalties pile up to the point that it's virtually impossible to catch up.

Whether you're in danger of missing your first mortgage payment or are already in line to lose your home to the bank, filing for Tennessee bankruptcy can stop foreclosure and provide a manageable way to pay down debt.

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We've all been there before. Our car breaks down and needs expensive repairs, we get a larger-than-anticipated medical bill, or some other unexpected expense pops up - and we wonder if anyone will notice if our bills are a little bit late this month.

But when it comes to the mortgage, a late payment almost always comes back to bite homeowners, according to a recent article in the New York Times.

While fewer Americans are falling behind on their house payments, many of us are still delinquent. As of late last year, one in eight homeowners was either at risk of foreclosure or already in the foreclosure process.

Financial experts expect delinquencies of 60 days or more to increase in the first quarter of 2012.

It all starts with a simple missed payment deadline.

How Payment Deadlines Work

Typically a mortgage payment is due the first of each month, though some lenders give borrowers a 15-day grace period.

Homeowners often hope their late payment will make it within this period. But if your check arrives after the cut-off time on the 15th day, you're out of luck, no matter when you wrote your check.

So what happens next? Lenders tack on a late fee that's 2-5 percent of your payment (your actual fee should be listed in your mortgage documents). Now you owe a late payment and penalty, plus your next mortgage payment, which may be due in just a couple weeks.

It doesn't take much for one late payment to turn into several.

How Late Payments Impact Credit

Your late fee is nothing compared to the damage done to your credit score. Once 30 days have passed, your lender must report your delinquency to credit bureaus, which transfer the discrepancy to your credit report.

A credit score drop by as much as 100 points for the first late payment, and will continue to decline as the days go by. Each missed payment can stay on your report for seven years.

Ironically, many homeowners avoid filing for bankruptcy to protect their home from foreclosure because they worry about how bankruptcy will affect their credit. However, filing for bankruptcy in Atlanta may be the only way that Georgia borrowers can get current on payments, thus avoiding future credit dings.

How Missed Payments Lead to Foreclosure

Homeowners who can get their payments back on track before falling 30 days behind have the best chance at recovering.

Once you're 120 days past due, the foreclosure process can be triggered. Getting current with payments before 120 days can protect your home, but the problem is that once homeowners fall this far behind, it can be nearly impossible to regain control because credit marks and fees have piled up so overwhelmingly

Whether you're days late on your payment or have already received a foreclosure notice, Atlanta bankruptcy may be your best chance at getting current. Chapter 13 bankruptcy has the ability to reduce credit card debt and organize your remaining debt into manageable payments.

The sooner you take action, the easier it will be to catch up - and start fresh.

Continue reading "Atlanta Bankruptcy Can Help Georgia Homeowners Delinquent on Mortgage Payments" »