• ‘Hidden Time Bomb’ Could Leave Thousands of Homeowners with Hefty Tax Bill

    We mentioned on Wednesday that one benefit of filing Chapter 7 bankruptcy is the elimination of tax liability on a mortgage deficiency. However, the Los Angeles Times reported on September 7, 2012, that many struggling homeowners could be facing a very unwelcome bill next year. When Congress passed the Mortgage Debt Forgiveness Act in 2007, the legislation forgave debt for declines in homeowner’s financial conditions or drops in home values. However, the Times noted that the exemption-as much as $2 million per household in principal reduction and other aid from banks-is currently set to expire at year’s end. As a result, the homeowners who obtained reductions in in their mortgage debt could receive a bill for taxes on that aid.

    “The expiration of that provision is a hidden time bomb,” Representative Jim McDermott told the Times.

    As the Times noted, mortgage debt forgiven by a bank as part of a principal reduction, short sale or foreclosure needs to be reported as income by the homeowner and is subject to taxes. Furthermore, nearly 140,000 homeowners who received some type of relief under the $25 billion foreclosure settlement reached last year with the nation’s five largest banks could also find themselves owing taxes. According to the Times, a middle-class household would owe 25 percent taxes on that relief. With the relief averaging about $76,615 for each household, the Times said the taxes would be around $19,000 for the average settlement relief so far. Additionally, the Times said the tax “would go up if the relief pushes the homeowner into a higher tax bracket or if the Bush tax cuts expire, as they are set to do at year’s end.”

    If you are among the thousands of Illinois homeowners who are in desperate need of foreclosure help , it is in your best interest to take action immediately. Our Chicago bankruptcy lawyers can help you determine whether Chapter 7 or Chapter 13 bankruptcy provides you and your family the most relief, and we can get started as soon as you complete the form located on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Homeowners Facing Foreclosure Should Know Three Benefits to Chapter 7

    On Monday, we discussed Illinois having the highest foreclosure rate in the nation in August and talked about some of the benefits that a Chapter 13 bankruptcy offers for homeowners needing foreclosure help . As we said on Monday, Chapter 13 certainly has its perks for individuals who have a reliable source of income and are determined to save their homes, but what about people who do not have the necessary income for a repayment plan or understand that they can no longer afford their homes?

    Chapter 7 bankruptcy is another option for these homeowners. While a Chapter 7 filing will not save an individual’s house, it does allow people to:

    • Live rent-free for a few months – While most Chapter 7 cases do not take more than four months to complete, individuals filing Chapter 7 can stay in their homes during this time. This gives people filing Chapter 7 the time they need to find somewhere else to live, but it also lets them save the money they may need for the transition. This aspect is especially important nowadays because last month, Crain’s Chicago Business reported that average apartment rents per square foot both downtown and in the suburbs had hit all-time highs.
    • Cancel most or all of their debt – Chapter 7 wipes out unsecured debts, such as credit card bills and medical bills. While it cannot erase certain debts such as child support or student loans, Chapter 7 can be beneficial for homeowners facing foreclosure because it eliminates their responsiblity for the deficiency balance (the difference between what the homeowner owed and what the house sold for at foreclosure).
    • Eliminate tax liability – The Internal Revenue Service (IRS) cannot tax an individual on a discharged deficiency balance. Filing Chapter 7 exempts that individual from tax liability for the discharge of his or her home loan, and we will further discuss tax issues facing struggling homeowners in our next blog post.

    Again, Chapter 7 bankruptcy has a lot of upsides for individuals who are ready to give up their homes because of foreclosures. You need to pass the bankruptcy means test before you can file Chapter 7, and our Chicago bankruptcy lawyers can help you get started when you complete the form on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • Foreclosure Filings Increase Nearly 150 Percent from Last Year

    The Chicago Sun-Times reported on September 13, 2012, that Illinois had the highest foreclosure rate in the country in August as foreclosure filings going through court were up 148.6 percent from a year ago. This was the first time that the Land of Lincoln led the nation in foreclosure filings since the real estate information company started issuing monthly reports in January 2005. The Chicago Tribune reported that compared to August 2011, default notices were up 18 percent, bank repossessions rose 41 percent and notices of scheduled foreclosure auctions increased 116 percent.

    These alarming numbers came on the same day that the Federal Reserve announced it would be buying $40 billion of mortgages a month in a move that some analysts believe could help lower mortgage rates by another quarter percentage point. That news was good for people buying homes, but it could also be really good for homeowners looking to refinance.

    However, refinancing is easier said than done. If you are one of the thousands of Illinois homeowners currently seeking foreclosure help and refinancing is not an option, you should know that filing Chapter 13 bankruptcy may be able to help you catch up on late payments you missed-and possibly let you keep your house. In Chapter 13, as long as you have a regular source of income, you could enter a three- to five-year repayment plan that reorganizes your debt.

    There are two main benefits to filing Chapter 13 bankruptcy if you are facing foreclosure:

    • Mortgage arrears can be worked into your plan – If you are several thousand dollars behind on mortgage payments, that mount will be worked into your plan and paid back over the course of between 36 and 60 months. You will be current on your mortgage once you complete your plan, and your unsecured debt such as credit card bills or medical expenses will be discharged as well.
    • Lien stripping – The downturn in the housing market has left many homeowners “underwater,” or owing more than their home is worth-and the economic effect is even worse for families with second or third mortgages. Lien stripping involves removing a second mortgage or home equity line of credit and lets you pay back only the first mortgage if your home is worth less than the balance due on your first mortgage.

    Chapter 13 bankruptcy can be tremendously beneficial for families that are eligible, but not all homeowners have the income necessary to make such a plan work. In our next blog post, we will discuss some of the benefits Chapter 7 offers homeowners facing foreclosure.

    If you are interested in filing Chapter 13 to try and save your home, time is of the essence. The plan only works if you file before the foreclosure sale occurs. Take action today by filling out the form on this page or contacting our firm at (866) 930-7482 to let our Chicago bankruptcy lawyers help.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Is Your New Job Making it Harder to Pay Bills?

    On September 12, 2012, the US Census Bureau released a report that further indicated the number of American families still struggling after the Great Recession. As noted in this PBS NewsHour video, roughly 46 million Americans are now living poverty, median household income slid for the second year to $50,000-the lowest level since the mid-1990s-and earnings fell 2.5 percent.

    At the end of August, a CNNMoney story began, “Sure, the economy is adding jobs these days … but most of those positions pay pretty poorly.” CNN said that a report from the National Employment Law Project showed 58 percent of the jobs created during the recovery have been low-wage positions, such as “retail salespeople, food prep workers, laborers and freight workers, waiters and waitresses, personal and home care aides, office clerks and customers representatives.” Many of these low-wage jobs pay less than $13.83 an hour, and the adjustment is additionally difficult for the 60 percent of Americans who lost previous jobs during the economic downturn that had been classified as mid-wage.

    Have you been struggling to make your mortgage payment ever since accepting a lower-paying job? Has making less led you to accumulate so much credit card debt that it has become unmanageable? Filing Chapter 7 or Chapter 13 bankruptcy could help you discharge unsecured debt or create a plan to pay back secured debt with respect to your current wages and cost of living. Our Chicago bankruptcy lawyers can tell you all of your options when you fill out the form located on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • Trap Doors Being Exploited In Cards ‘Designed To Be a Safety Net’ For Consumers

    On Monday, we noted some encouraging stories indicating that Americans were cutting back on borrowing, credit card debt was declining and the Consumer Financial Protection Bureau (CFPB) was putting more institutions on notice about deceptively marketed products. However, a Wall Street Journal story published on September 5, 2012, called attention to another type of plastic that is starting to become a growing problem: prepaid cards.

    Noting that these “cards were designed to help the less-affluent have better control their finances by allowing them to spend only the preloaded amount,” the Journal reported that some consumers are now accumulating debt because of overdraft and other credit-like features have been added to the cards in recent years. Furthermore, the Journal also stated that prepaid cards are “among the fastest-growing types of plastic,” as American consumers loaded $83.3 billion onto prepaid cards in 2011. Payment-industry researcher Mercator Advisory Group said this was a 34 percent increase over the prior year, according to the Journal.

    The National Consumer Law Center, the Center for Responsible Lending and the Consumer Federation of America are now lobbying the CFPB to prohibit prepaid cards from offering any type of credit. The Journal reported the agency is “evaluating the consumer advocates’ proposal as part of a broader effort to more-closely regulate prepaid cards.”

    The Journal story began by citing an Ohio man who borrowed $400 and loaded it onto a prepaid card, beginning a cycle of debt that would ultimately result in $1,344 of total fees from the card provider by the time the man stopped borrowing a year later. “Prepaid cards were designed to be a safety net,” Steve Streit, chief executive of prepaid card issuer Green Dot Corp., told the Journal. “Once you start adding overdraft and other types of credit, it becomes a form of debt.”

    Does this situation sound similar to your own? You should know that you may be able to wipe out your credit card debt by filing Chapter 7 or pay back a portion of the debt through a Chapter 13 bankruptcy plan. Our Chicago bankruptcy lawyers can help determine which plan you are eligible for when you fill out the form on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Credit Card Debt, Borrowing Fall as CFPB Takes Aim at Add-On Costs

    July as consumer debt declined, even as Americans boosted their spending by the most in five months. The Post said it was the first time that Americans cut back on borrowing in nearly a year, adding that the drop in credit card debt offsets “a small rise in a measure of auto and student loans.”

    This came less than a week after the Detroit Free Press said that more credit card holders and consumer groups could also be saying good riddance to very costly add-on products, such as so-called “credit-protection plans.” This is because the Consumer Financial Protection Bureau (CFPB) is putting multiple institutions on notice about misleading debt-protection products and consumer insurance. These plans are under fire from the CFPB for deceptive marketing practices, and the Free Press reported that one settlement with regulators resulted in Capital One Bank refunding about $150 million to 2.5 million customers as well as paying $60 million in penalties.

    While these are all encouraging developments that can hopefully help more individuals avoid the burden of credit card debt, there are still other concerns that we will discuss in our next blog post. Are you currently overwhelmed with credit card bills? You should know that filing Chapter 7 or Chapter 13 bankruptcy can end calls from debt collectors and may be able to give you a fresh start by wiping out the credit card debt or allowing you to only pay back a fraction of what you owe. Fill out the form located on this page or contact our firm at (866) 930-7482 to see what our Chicago bankruptcy lawyers can do for you.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • What Will Higher Food Prices Mean For You?

    While we often write about the problems that the bigger payments like mortgages, medical bills and student loans cause for families throughout the Chicagoland area; however, the truth is that the increase in the smaller everyday bills can be just as devastating. In a September 3, 2012, column for CNN, author and Newsweek editor David Frum predicted that 2013 will be a year of serious global crisis.

    As Frum noted and many families across Illinois have felt, an intense summer drought has ruined key crops. The corn harvest will drop to its lowest level since 1995, and Frum noted that corn and wheat prices increased about 25 percent each while soybean prices climbed roughly 17 percent. This will lead to all sorts of higher food prices, ranging from meat and poultry to dairy products.

    The Tennessean reported that a gallon of milk “will cost 10 cents to 15 cents more by Thanksgiving and rise an additional 25 cents by year-end.” Last month, the PBS NewsHour reported in the video above that a price index from the US Agriculture Department showed that “overall food prices would increase about 3 percent to 4 percent because of the drought,” with the corn intensive items like beef, pork, poultry and eggs most likely to be impacted.

    While Frum wrote that higher food prices are “in almost all cases, a manageable burden,” how much will each additional dollar every week affect you and your family? If you have been scraping by every month and are in need of debt relief in order to keep up with the cost of living, then Chapter 7 or Chapter 13 bankruptcy may be the answer you need. Filing bankruptcy delays foreclosures and ends the calls from debt collectors.

    Our firm can pull you out of what seems like a crisis or we can help you avoid what could turn into one. If you are tired of fearing what financial obstacle might come up next, contact our firm today at (866) 930-7482 or use the form on this page to let our Chicago bankruptcy lawyers see how we can help eliminate as many of those obstacles as we can.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Are You Tired of Being ‘Stuck in Slow-Growth Mode’?

    While Bloomberg Businessweek reported on August 31, 2012, that consumer confidence hit a three-month high in August, an update released less than a week later by the Institute of Government and Public Affairs at the University of Illinois said the state’s economy is “stuck in slow-growth mode.” The State Journal-Register reported on September 4, 2012, that a “flash index” of corporate, individual and sales tax receipts was unchanged at 102.9 in August. The figure has remained in that range for the past three months after what the Journal-Register said had been two years of steady growth.

    “As is the case in months past, while the rate of growth is now positive, it is not strong enough to make much headway in reducing the unemployment rate,” the report stated.

    As the local economy continues to underwhelm, it’s thousands of middle-class families in Chicago and surrounding areas that continue to feel the burden. Millions of homeowners dig deeper into credit card debt just to pay for gas and groceries. They are forced to sweat every month as they wonder whether or not they will have the money to get by.

    While all of us want to see the news get better, the reality is that times are tough. If you are struggling to pay your mortgage or your family is facing the threat of foreclosure, you need to know that you have options. Filing Chapter 7 or Chapter 13 bankruptcy can help bring you the relief you need by ending the calls from debt collectors and giving you a fresh start. If you want to see what our Chicago bankruptcy lawyers can do for you, get started by completing the form located on this page or contacting our firm today at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • Homeowners Over 50 Being Hit Hard by Foreclosure

    Reuters reported on August 21, 2012, that a report from the AARP Public Policy Institute shows roughly 3.5 million homeowners owe more on their mortgages than their properties are worth. One troubling aspect to the report was the finding of the much higher rate of growth in foreclosures for homeowners over the age of 50 between 2007 and 2011. The Associated Press video above from July 2012 noted many of the challenges facing older homeowners.

    According to Reuters, 2.92 percent of mortgage loans to these households had been foreclosed at the end of last year. AARP said this was an astonishing 873 percent increase from 2007. “The study adds to the growing mountain of evidence that the economy has shredded retirement possibilities, especially for low and middle-class households,” Reuters said. “Lower home values are especially devastating for these demographic groups.”

    Reuters noted that another report by the online marketplace for foreclosed properties, RealtyTrac, found that the number of foreclosures rose in 59 percent of the nation’s top metro markets. Illinois accounted for two of the top 20 metro foreclosure rates.

    If you are facing the threat of foreclosure, you should know that filing Chapter 7 or Chapter 13 bankruptcy can help you delay the process and may be able to help you keep your home. It can also provide you and your family with the fresh start you need to get your finances in order and stop struggling with incessant calls from creditors. Complete the form on this page to let our Chicago bankruptcy lawyers review your case or contact our firm today at (866) 930-7482 to set up a consultation.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • More than 5,000 Illinois Homeowners Receive Over $357 Million in Relief

    According to a Chicago Tribune story published on August 29, 2012, more than $357 million in relief has made its way to 5,268 Illinois homeowners as of June 30, 2012. This is the result of the $25 billion national mortgage foreclosure settlement in February 2012 with the country’s five largest mortgage servicers-Bank of America, CitiMortgage, Ally Financial, JPMorgan Chase and Wells Fargo-over “shoddy foreclosure practices.” This information was in a report released on August 29 by the independent monitor of the settlement.

    “I am cautiously encouraged by the initial progress reported by the independent monitor,” Attorney General Lisa Madigan told the Tribune. “We’re starting to see real results for Illinois families.”

    The Tribune reported that Illinois ranks fourth in total number of borrowers who have received assistance, and the servicers reported that they granted $10.56 billion of relief nationally to 137,846 borrowers between March 1 and June 30.

    Are you facing foreclosure? You may be able to delay or avoid foreclosure by filing Chapter 7 and Chapter 13 bankruptcy . If you would like to learn more about filing bankruptcy and the benefits of an automatic stay, complete the form on this page to let our Chicago bankruptcy lawyers review your case or contact our firm today at (866) 930-7482 to schedule a free consultation.

    Benjamin Brand Services – Chicago bankruptcy lawyers