DebtStoppers USA Bankruptcy Blog

A few years ago, it seemed that credit card offers had all but dried up. These days, mailboxes are once again being flooded with offers touting 0% interest rates.

Credit card solicitations this spring are up a whopping 18.5 percent since the last quarter, according to new research from the Mintel Group.

At first glance, it may look like consumers have won back the upper hand - but that's mostly an illusion, explain our bankruptcy attorneys.

For borrowers - especially those of us who substantially added to our credit card debt during the recession - the promise of 0% APR is awfully alluring. In theory, transferring a balance from a card with a high rate to one with no rate at all should save money by eliminating interest charges.

In reality, these offers come with a catch - usually in the form of various fees.

While you may not be paying interest, you'll likely pay a balance transfer fee - on average, 3 percent of your balance - to switch cards. That means that transferring a $20,000 debt will cost you $600, which may exceed any potential savings.

Even the benefits of zero percent are fleeting. Once your introductory period is over, your interest rate could skyrocket beyond what you were paying before. Additionally, any slip-up - be it a late payment or just exceeding your credit card limit - could be grounds for the bank to revoke your 0% rate before it expires. And don't forget that every time you apply for a new credit card, your credit score takes a hit. The more debt you have, the more you'll get dinged.

If you're not careful, transferring your balance could land you right back where you started: Carrying too much debt on a credit card with an outrageous interest rate.

If you're drowning in debt, juggling it around isn't a solution. You need to lower your balance. Bankruptcy is the most efficient way to eliminate debts you can no longer afford to repay.

When you file for bankruptcy, the benefits are immediate. An automatic stay prevents creditors from contacting you and protects personal property, including your home. Wage garnishment is halted. And while bankruptcy can lead to an initial drop in your credit score, once you've discharged debt your credit will begin climbing.

Continuing down the same path that led to debt in the first place won't change your situation. But bankruptcy can.

Bankruptcy certainly isn't something to be taken lightly. But for many folks, bankruptcy offers what other methods don't: a chance for real and lasting financial freedom.

Continue reading "How 0% APR Credit Card Offers Are Leaving Borrowers with Even More Credit Card Debt" »

Nobody likes dealing with debt collectors. But for certain groups - such as retired people or those of us who work from home - the harassment can become unbearable.

Seniors, stay-at-home parents and people with home offices are more likely to be at home during work hours, when bill collectors are most likely to call. They're also more likely to have a land line, making them easier to track down.

But they do have one thing in common with most consumers: Few of us are aware of our rights when it comes to debt collection.

If you're behind on payments for credit card debt, a mortgage or a personal loan - or a credit report mistake makes it appear as if you are - it's only a matter of time before creditors hire a lawyer or debt collection agency to recoup funds.

Often times, bill collectors will try to get their way by wearing consumers down through bullying behaviors.

Common tactics include calling at all times of the day, threatening to publish your name or throw you in jail, misrepresenting themselves as attorneys or creditors, misrepresenting documents (i.e., indicating papers are legal forms or official documents when they are not) or even threatening violence.

While common, all of these methods are completely illegal.

According to the Fair Debt Collection Practices Act, bill collectors are prohibited from using abusive, unfair, or deceptive practices to collect from consumers.

And as a consumer, you have the right to stop creditor harassment by informing creditors and collection agencies - in writing - to stop contacting you. While this can't keep a creditor from suing you, it can offer a much-needed respite from debt collection badgering.

Unfortunately, many delinquent consumers are too intimidated by threats to take action. Debt collectors harass consumers because they know fear tactics are the most effective way to gain the upper hand.

But you don't have to put up with it. Filing for bankruptcy is the fastest way to stop creditor harassment. When you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, an automatic stay stops debt collection phone calls, wage garnishment and creditor lawsuits. Meanwhile, you can eliminate the root cause of the harassment by finally getting out of debt.

No one should have to put up with harassment. Debt isn't a crime; creditor harassment is. Bankruptcy can help you escape the burden of debt collection for peace of mind - and peace and quiet.

Continue reading "For Folks Hounded by Debt Collectors, Bankruptcy Promises Peace and Quiet" »

By most media reports, the Great Recession is officially over. But that doesn't mean it's done affecting consumers - especially those in a particular age group.

According to a recent report, Generation X could be haunted by debts accumulated during the downturn well into retirement.

While income and consumer confidence are on the rise, it could take decades for savings funds to recover from the blow they took during recent tough economic times.

Baby boomers born between 1946 and 1955, for instance, lost 28 percent of their median net worth between 2007 and 2010. Later boomers, or those born between '56 and '65, lost an estimated 25 percent during that time.

But Generation X has them all beat: Folks born between 1966 and 1975 lost a whopping 45 percent of their wealth.

Worst of all, those in their 30s and 40s had the least amount of savings to begin with. That may be because they're the most likely group to be grappling with expenses such as house payments, raising a family, old school loans and credit card debt.

Part of the problem is that Gen X wasn't exactly in great financial shape prior to the recession, with far less wealth than previous generations had at the same age. In fact, the average Gen-X consumer currently has $80,000 in debt.

Financial experts advise that retirement savings should replace 70 to 100 percent of pre-retirement income. If Gen-Xers keep saving at their current rate, most will only be able to replace 50 percent of their paycheck.

But all hope is not lost. Remember, we're talking about the average consumer here - not every consumer.

The average consumer is buried in debt. The average consumer is drowning in student loans. The average consumer has more mortgage than she can afford and is facing foreclosure. In short, the average consumer has way too much debt. But it doesn't have to be that way.

Our DebtStoppers bankruptcy lawyers have helped thousands of consumers overcome overwhelming debts to find financial independence now and into the future.

A Chapter 7 or Chapter 13 bankruptcy plan has the power to eliminate debt - and, along with it, stress, anxiety and obligations.

By simply dealing with debt, it's possible for most folks to rise above financial troubles to achieve a financially stable future.

All too often, people accept debt as a fact of life because they feel powerless to fix their financial problems. Bankruptcy puts power back into the hands of consumers. And as so many of our clients already know, there aren't many things more empowering than finally breaking free from debt.

Continue reading "Great Recession May Have Long-Term Effects on Finances of Gen-Xers" »

Filing for bankruptcy isn't something to be taken lightly, but the consequences are not as dire as most consumers think.

While many folks worry bankruptcy will be the end of their financial freedom, it could actually be a new beginning. Take unsecured credit offers, for example.

It's a commonly held belief that it will be difficult to impossible to get a credit card after bankruptcy. But as a recent Bankrate.com column points out, a bankruptcy discharge can, in some ways, make you more appealing to creditors.

If you qualify for Chapter 7 bankruptcy, your debts could be eliminated entirely within a matter of months. With no debt, you're an ideal candidate for new credit cards.

Furthermore, creditors know that it will be eight years before you're eligible for another debt discharge through Chapter 7 - and you're unlikely to file again anyway, as most people who go through bankruptcy only do so once in their lifetime.

Consider it bankruptcy's hidden benefit: In many cases, receiving a bankruptcy discharge can actually improve credit.

That's not to say bankruptcy comes without drawbacks.

Yes, when you file, the bankruptcy will appear on your credit report for the next 10 years. And yes, if you have a history of bad credit, the credit card offers you receive initially will probably come with high interest rates, low credit limits and other less-than-stellar terms.

But look at it this way. Bankruptcy provides a fresh financial start, so in theory you won't need to be reliant on your new credit card anyway. When you use plastic only occasionally and make sure to pay your balance each month, you won't have to worry about a low limit or sky-high interest.

Instead of focusing on the best offer, focus on the one that will allow you to most quickly reestablish good credit, such as a secured card, says Bankrate.com. A card from a bank or credit union may come with fewer perks than one from a finance company, but will be viewed more favorably by lenders - and that's what counts.

The sooner you begin reestablishing credit after bankruptcy, the sooner lenders will trust you enough to consider you for a mortgage, car loan, or better credit card.

With responsible financial behavior, your life after bankruptcy can become more financially rewarding than you could have imagined.

Continue reading "Getting Credit Cards After Bankruptcy Easier Than Most Consumers Think" »

Even though the average wealth of U.S. consumers is on the rise, younger generations of Americans are actually becoming less wealthy.

How is that possible? While incomes are finally starting to pick up, workers are saving less - particularly younger workers.

According to the New York Times, a recent study found that people under 40 have less wealth than their parents did at the same age.

In the past, disciplined consumers could save money left over after they'd paid rent, food and living expenses. Over time, their growing cash cushion would compound, creating even more wealth. The earlier a saver begins socking away money, the more wealth is accrued.

But these days, money that should be going to nest eggs is instead going toward growing credit card debt and overwhelming student loan payments. In fact, data by the Pew Research Center shows that 40 percent of young consumers had outstanding student debt in 2010 - up from 34 percent just three years earlier.

To make matters worse, some young adults poured all of their savings into purchasing homes at the height of the housing bubble. As home values fell, borrowers lost the equity paid into their properties - and many are now facing foreclosure. Still others have yet to buy a home and, without much money to their name, are unlikely to qualify for an affordable mortgage.

Yet another drawback to getting a late start on saving: It's too easy for any unexpected expense - from car repairs to temporary job loss - to obliterate extra cash and sink you deeper into credit card debt.

It seems that today's consumers are at an impasse: Young people need to save money to eliminate debt, but until they deal with debt, how can they start saving?

When you're at a financial standstill, waiting for things to get better usually just results in allowing them to get worse. The sooner you take action, the sooner you can find the financial stability to actually start saving.

For many people with overwhelming debt, bankruptcy can provide the financial relief necessary to turn over a new leaf.

With the right bankruptcy plan, it's possible to reduce or eliminate your debt burden, which in turn will free up more money from each paycheck. If you qualify for Chapter 13 bankruptcy, you'll also enjoy protection against foreclosure.

Don't let the opportunity for a financially-secure future pass you by. The sooner you tackle debt, the sooner you can start putting your money to work for you. Bankruptcy can give you the running start you need to make it happen.

Continue reading "Credit Card Debt, Student Debt Keeping Younger Generations From Building Wealth" »

Fewer young adults are in debt today than 10 years ago. But as it turns out, that may not be a good thing.

It's not that people in their 20s and 30s have become more financially responsible overnight. Rather, it's that their fiscal behavior over the past decade has finally made it impossible for them to qualify for loans.

While debt increased 63 percent for Americans over 35 between 2001 and 2010, it actually dropped 14 percent for the under-35 crowd, according to a recent survey by the Pew Research Center.

Older consumers already have mortgages, home equity loans and car loans and, as our bankruptcy lawyers discussed in a recent post, their debt load has only increased as they've tacked on new credit card debt. As a result, many baby boomers are facing the possibility of delaying - or eliminating - retirement because they simply can't afford to stop working.

At the other end of the spectrum, young Americans are beginning to suffer the consequences of too little debt.

Younger consumers have credit card debt and, increasingly, student loan debt. What they don't have is so-called "good" debt that can increase in value, like a mortgage or business loan. But when you combine a lot of unsecured debt (i.e. credit card debt) with a weak job market, it's no wonder younger generations are struggling to get loans.

Instead of continuing to add credit card debt, many are choosing to pull back on plastic. Between 2008 and 2012, borrowers between 25 and 34 decreased their credit card debt by half.

While carrying a more manageable debt load can help improve one's credit score, it's only part of the picture. Creditors also want to see that a borrower can make consistent timely payments on a mortgage, car loan or other obligation. Yet only 66 percent of young consumers own at least one car, and just 34 percent own their own home - down from 40 percent in 2007.

For most people, it's better to use plastic responsibly than to not use it at all. Putting a reasonable number of purchases on credit and paying off your balance each month can be a wise way to build credit - so that when you do apply for a loan, you don't get skewered by impossibly high rates.

If limited income combined with too much credit card debt is your problem, however, bankruptcy may be able to help.

In many cases, the reason young consumers are avoiding new debt is that they're already overwhelmed by previous debts. Although bankruptcy can't lower student loans, it can eliminate credit card debt and other expenses that may be interfering with student debt payments.

Chapter 7 bankruptcy is ideal for those with overwhelming bills and expenses, but no major assets like a home to protect. Unlike Chapter 13 bankruptcy, which reorganizes debt into more manageable payments, Chapter 7 has the power to discharge unsecured debt entirely - sometimes in as little as a few months.

Whether you have too little debt or too much debt, making the right moves today can help you achieve financial independence in the future. At DebtStoppers, we can help make your dream of financial freedom a reality.

Continue reading "Without Good Debts, More Young Consumers Unable to Get Loans" »

Traditionally, the stereotype of a consumer with too much credit card debt has involved a young person - perhaps a recent college graduate with student loans or a young couple with a mortgage.

But new data suggests that older Americans are struggling just as much - and sometimes more - than their children and grandchildren.

According to a recent study, low- and middle-income households of Americans age 50 and older owe more than $8,000 in debt on average. In comparison, those under 50 owed just over $6,000.

It's not so much the amount of debt that's troubling, but the amount of time it will take to recover from that debt, explain our bankruptcy lawyers.

Unlike young people, baby boomers don't have decades of time to tackle debt problems before they reach retirement age. As a result, many people in their 50s and 60s are planning to postpone leaving the work force - or to keep working indefinitely.

All too often, debt sneaks up on older Americans as they help their children with school and living expenses, shoulder increasing medical costs and deal with layoffs or reduced hours.

Soon, most of their income is going to minimum payments on credit card bills, requiring them to continue using plastic for everyday expenses like utility bills, gas and groceries - further increasing debt and associated interest.

To make the picture even bleaker, many older Americans are also dealing with upside-down mortgages and shrinking pensions.

By the time boomers realize they're in trouble, it's often too late for them to lower debts on their own. Yet they are frequently too afraid or embarrassed to ask for help.

The good news is that help does exist. When debts are too overwhelming to face alone, bankruptcy can offer a realistic solution.

There's no reason to be ashamed of filing for bankruptcy. In fact, baby boomers are filing for bankruptcy at higher rates than any other generation: It's estimated that nearly half of all bankruptcy filings are now by people over age 45.

Filing for bankruptcy makes it possible to reorganize debt payments, stop foreclosure and - in some cases - discharge debts entirely.

Rather than look at bankruptcy as a last resort, consider it one of your first strategies. The earlier you reduce your crushing debts, the longer you'll have to rebuild your savings in preparation for retirement.

Enjoying one's golden years doesn't have to be a pipe dream. When you take the right steps to get out of debt today, you pave the way for a rewarding and relaxing future.

Continue reading "Crushing Credit Card Debt Causing More Workers to Postpone Retirement " »

Falling behind on debt payments is stressful enough as it is. But for all too many borrowers, the situation is made even worse by harassing debt collectors.

Collection agencies are paid by creditors to help persuade delinquent borrowers to pay up. For their work, they often receive a fee or percentage of any repaid debt.

As you might imagine, that gives collection agencies a strong incentive to do anything and everything they can to coerce borrowers into making debt payments - whether those borrowers can afford to pay or not.

Debt collectors are required to follow certain guidelines under the Fair Debt Collection Practices Act. However, with so many Americans defaulting on debts, more and more agencies are shirking the rules and resorting to outright bullying.

A recent article in CNN Money documented some of the worst instances of harassment: threatening to throw debtors in jail, take away their children, do harm to their pets or - in perhaps the most outrageous case - dig up dead relatives who were delinquent on their debts.

In many situations, bill collectors attempt to wear down debtors by calling incessantly at home and even at work. Sometimes they've been known to harass the wrong person about a debt that isn't theirs to begin with.

Often times, debtors are suffering from so much stress and guilt that they don't realize the harassment they are receiving from debt collectors may qualify as abuse. The truth is that collection agencies that don't play by the rules are breaking the law.

Debt collectors are prohibited from inflating debts, posing as attorneys, using offensive language, and threatening any kind of violence. And without a court order, they cannot make threats to garnish wages, repossess property or have a borrower arrested. By law, borrowers are not even required to communicate with collectors.

If you live in fear that every phone call will be another debt collector calling to hassle you about late payments and overdue bills, it may be time to seek outside help.

You may be behind on your debts, but you are still entitled to your rights - and respect - as an American citizen.

If debt collectors are making your life a living hell, bankruptcy can be your saving grace. When you file for bankruptcy, you put a legal stop to collection efforts - and contact with debt collectors.

With the pressure of collection calls lifted, many folks find that it's a lot easier to work out a repayment plan for debts. Whether you're behind on mortgage payments, credit card bills or medical expenses, bankruptcy can give you the time and the flexibility you need to get your family's finances back on track.

Continue reading "For Borrowers Relentlessly Hounded by Debt Collectors, Bankruptcy Can Bring Peace and Quiet" »

Youth isn't always what it's cracked up to be, at least not these days. According to a recent study, U.S. consumers in their 20s and 30s have more credit card debt than any age group.

Not only that, but they're also slower to pay off debt and more likely to ultimately die in debt when they fail to address their spending habits.

Americans born between 1980 and 1984 were found to carry the most debt - $5,670 more than their parents had at the same age, on average, and a whopping $8,150 more than their grandparents.

The researchers pointed out what our DebtStoppers bankruptcy attorneys have known for a long time: Young consumers who don't curb their credit habits today will likely die still owing debts, leaving their children responsible for their debt burdens.

If consumers continue to take on debt at the same pace, the future elderly population will be unable to afford retirement due to their massive credit card bills.

The problem isn't just the amount of credit card debt accumulated by young people, but the way in which they handle it.

Because credit is more widely available and debt is more socially acceptable, young adults are more willing to take on new debts before they've paid off old ones and to make minimum payments while allowing debt to grow.

While credit card debt no longer comes with the same stigma, it still has the ability to wreak havoc on your financial future. As debt grows, so do late fees and high interest rates; phone calls from harassing debt collectors; and the risk that your tarnished credit score will make it impossible to qualify for loans or future credit.

On the other hand, personal bankruptcy continues to carry a stigma, but remains the most effective way to break free of overwhelming debts.

Many young people fear filing for bankruptcy will damage their credit without realizing that their credit scores have already hit rock bottom thanks to late payments, busted credit limits, and enormous balances.

When you've dug yourself deep into a dark hole of debt, bankruptcy can give you the traction you need to claw your way out.

The sooner you resolve debt with bankruptcy, the sooner you can begin rebuilding your credit - and your life - for a brighter financial future.

Continue reading "For Young Americans Trapped Under Crushing Credit Card Debt, Bankruptcy Can Be Saving Grace" »

It's common knowledge that filing for bankruptcy takes a toll on credit. But it turns out that most of us overestimate the extent of the damage.

As a result, millions of people may be missing out on the opportunity to escape a mountain of debt or save their homes from foreclosure with help from bankruptcy.

According to a recent column on Bankrate.com, many consumers are able to begin rebuilding credit immediately after filing.

It's often assumed that it will be difficult to qualify for a credit card or loan after bankruptcy. In reality, however, the majority of people who file get credit card offers shortly after receiving a bankruptcy discharge.

In fact, according to the article, the number of companies offering credit to people who have filed for bankruptcy are on the rise.

It's true that bankruptcy will remain on a credit report for up to 10 years. But though it may sound counterintuitive, bankruptcy can also make you a prime candidate for credit.

If you've filed for Chapter 7 bankruptcy, you won't be able to file again for another 8 years - if you ever file again, that is. The reality is that most people will only file for bankruptcy once in their life, and creditors know this.

Of course, just because you're receiving credit card offers doesn't mean you should apply for multiple credit cards.

Credit card issuers also know that, because bankruptcy initially compromises your credit, they can charge a higher interest rate. Having a low credit score means less favorable terms, lower credit limits, and extra costs like annual fees.

The good news is that it's possible to begin improving your credit score - and your chances of obtaining better rates on car loans, mortgages and credit cards - from the moment your debt is discharged with bankruptcy.

By taking steps such as paying your bills on time, staying under your credit limit, and paying off your balance each month, your credit score will slowly but surely begin to increase.

If you can't qualify for an affordable rate or don't trust yourself with a traditional credit card, a secured card or loan is a smart alternative. With a secured line of credit, you provide a sum of money to a bank upfront and receive a credit limit for the paid amount.

If you're considering filing for bankruptcy, chances are your credit is already suffering and only getting worse by the day. With the right bankruptcy plan, it's possible to stop the financial bleeding and start the healing process.

Filing for bankruptcy isn't the end of the world - for many, it can be a brand new beginning.

Continue reading "Rebuilding Credit After Bankruptcy May Be Easier Than You Think, Say Experts " »

The finances of young Americans have been thrust into the spotlight recently, thanks to growing concerns over the nation's skyrocketing student debt load.

But many college students face an additional financial problem, say bankruptcy attorneys.

In 2008, most graduates left college with at least one credit card and $4,100 in credit card debt. With the cost of tuition rapidly increasing each year, it can be surmised that today's graduates shoulder even larger debt burdens.

Now combine that credit card debt with the $25,000 in college loans the average student graduated with in 2011 - not to mention the fact that entry-level jobs are harder to come by these days.

According to The Wall Street Journal, a recent study showed college students with the least amount of financial knowledge are two times more likely to max out their credit cards than a more financially-enlightened student.

In addition, they are more apt to make late payments and take cash advances - both behaviors that put them at risk for long-term financial problems.

With such a heavy burden, more and more young adults are putting off borrowing money for homes and cars, purchases that have traditionally stimulated the economy.

The good news is that, while students are stuck with student loan debt, credit card debt can be managed - and even avoided.

By helping young adults learn responsible money management skills, high schools, colleges and (maybe most importantly) parents can pave the way for a brighter financial future.

Young adults with a high amount of personal finance knowledge are much less likely to engage in risky credit behaviors like blasting through their credit limit and missing payments.

As for existing credit card debt, bankruptcy may be the smartest solution. Depending on their income level, college students may be eligible for Chapter 7 bankruptcy.

Chapter 7 is the fastest and easiest way for young adults to get rid of crippling unsecured debts, such as credit card debt and medical bills. Those who qualify can often eliminate debts completely.

For those ineligible for Chapter 7, Chapter 13 bankruptcy provides a way to reorganize debt, offering precious financial relief.

Graduating from college should provide a head start, not a burden. The right bankruptcy plan can help.

Continue reading "Without Personal Finance Know-How, Today's Young Adults Are Getting into Trouble with Credit Card Debt" »

While many people believe that filing for bankruptcy is going to leave them with bad credit, the inability to get a loan and no way to ever own a house, that's simply wrong.

Walletpop.com offers five tips to rebuilding your credit, finances and emotions after filing for Chapter 7 bankruptcy in Atlanta or Chapter 13 bankruptcy in Georgia.

Atlanta Bankruptcy Lawyers have seen the financial freedom that people experience once they've been through the bankruptcy process and no longer have the burden of creditors calling and sending letters to their home or work.

The first thing people should realize is that if you're considering bankruptcy, you're not alone and you shouldn't be ashamed. Bankruptcy laws are designed to help people willing to help themselves. The No. 1 cause of bankruptcy in America is sky-high medical bills, which are often no fault of the person paying them. With the Great Recession stripping jobs from millions of people, it's no surprise that people are seeking bankruptcy protection in record numbers.

According to The Wall Street Journal, bankruptcy filings in Georgia increased 6.1 percent from 2009 to 2010. And according to the American Bankruptcy Institute, there were more than 353,000 personal bankruptcy filings nationwide in the first quarter of 2011. In Georgia in the last quarter of 2010, more than 20,000 people filed for personal bankruptcy protection.

Here are the tips:

Let go of the guilt and shame: Some people consider filing for bankruptcy a sign of failure or disappointment, but it usually isn't. With the economy and the devastated real estate market, it is actually a smart move and one that can ensure the financial stability of a family's household long into the future. Plus, medical bills and outside factors are typically the reasons for bankruptcy, not always poor credit management.

Reflect and Regroup: Take some time after filing for bankruptcy to reflect on why you were in the situation in the first place. If overuse of credit cards, splurging or other problematic activities were the cause, resolve to stop that in the future. Allow the bankruptcy process to help you and lean on friends and family for emotional support.

Create a realistic budget and pay existing bills over time: After bankruptcy, stay on top of your finances. Create a budget and live within your means. Don't try to keep up with the Joneses. Pay off bills and don't get stuck with interest penalties.

Pick a credit card that can help you rebuild credit: Sometimes, secured credit cards can help you build credit. Many allow you to deposit a certain amount that acts as a spending limit. But some don't report your payments to credit bureaus, charge high fees and some people may not qualify. So, be careful.

Separate fact from fiction about bankruptcy: Many people think that filing for bankruptcy disqualifies them for getting any type of credit for 10 years. But, in fact, many people get dozens of credit card offers just after bankruptcy. Some car dealers are willing to offer good interest rates and some can even get home loans shortly after bankruptcy is finalized.

Continue reading "Life After Bankruptcy in Atlanta Easier With Five Tips for Moving On" »

Banks are big businesses that we rely on to keep our money safe and our accounts secure. Many banks, despite help from the government, lose their way and need bailed out by other banks that have the finances to overtake them.

We have seen this quite often in the last few years. But transitions don't always go smoothly and many times mistakes are at the expense of the customer. Consolidations often cause errors in customer records, which have a lasting negative effect on bank clients. Bank customers who don't check their accounts routinely can find themselves in the midst of a credit debacle when applying for car loans, mortgages, or home equity loans.

Erroneous accounts lead to lenders denying loan applications for customers who wouldn't normally be denied. Chicago Bankruptcy Lawyers know that the behavior of banks has had much to do with the economic problems facing consumers. Banks have swung from free credit to no credit. Understanding your rights as a debtor is critical to protecting the financial well-being of you and your family.

The Chicago Tribune recently reported about a woman in jeopardy of personal bankruptcy after a bank take-over which ultimately ruined her credit score. A respectable business woman and entrepreneur, she discovered that her bank was double-reporting her loans to credit bureaus following a takeover of her original bank. Potential lenders denied her loan applications because on paper, she looked like she was way over extended.

Unfortunately, it's not an uncommon problem. "Bank A acquires Bank B, and during the absorbing of Bank A something goes awry and accounts get misreported to the credit bureaus," states a former executive with a credit reporting firm. The former executive personally went through the same situation and is currently serving as an expert witness in a similar case.

We posted previously on our Chicago Bankruptcy Lawyer Blog how important credit scores are when applying for loans because high ratings can ultimately save you money.

After years of fighting with the bank to repair the error made on her credit, the Winnetka businesswoman filed a federal suit. Following her first complaint over 5 years ago, she saw her FICO score fall in excess of 75 points. Then, seeking help from a credit-repair firm, she was told the errors were not fixable. In total she has five loans with the bank totaling $3.8 million but the misreporting made it look like she was over her limit on all five loans. The judge has dismissed some claims but has upheld a complaint that the bank pulled her credit report when she had not applied for a loan. Bank customers are protected by the Fair Credit Reporting Act which states credit reports cannot be reviewed without the permission of the client.

Continue reading "Chicago Bankruptcy Attorneys Warn of Risks of Bank Consolidation" »

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?" »

Consumer spending has been rapidly on the rise in 2011. That means the economy is rebounding, right? Well...not exactly, say Atlanta bankruptcy attorneys.

It turns out that most of the increase is actually due to - you may have guessed it - higher gas prices. Prices at the pump saw record increases in the past couple months, and it's only predicted to get worse. Talk about bad timing - economic growth was just starting to pick up in the last quarter. So how are we supposed to get back on our financial feet when prices keep going up?

Continue reading "Atlanta Consumers Spending More, But Higher Gas Prices Play a Part" »