• 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

  • 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