• Understanding Your Debt Options

    With national household debt totaling $13.3 trillion, a USA Today story published on November 16, 2011, examined some of the options available to the millions of Americans currently burdened by the amount they owe.

    The first option USA Today discussed were credit counseling agencies, saying, “Without trying to sell you something, they can show you how to manage your finances by cutting back on spending and keeping up with bill payments.” However, as Liz Pulliam Weston of MSN noted in August 2009 that only about one-third of the 3.2 million people who contacted National Foundation for Credit Counseling (NFCC) agencies were able to handle their finances on their own after a counseling session. Another third “were either too far gone for debt management plans to help, with too little income or too much debt, or had problems credit counseling couldn’t help and were referred to social services agencies because of issues such as a gambling problem, alcoholism or other addiction.”

    The final third enrolled in USA Today’s second suggested option for debt-management plans (DMPs), but as Weston noted, the dropout rate for DMPs averages at least 45%. The NFCC came up with another repayment plan, “Call to Action,” but some are simply too far behind to handle regular monthly payments.

    The third option presented was debt settlement, but even USA Today acknowledged that the industry has been in flux ever since the Federal Trade Commission approved a rule preventing debt-settlement companies from charging upfront fees before a settlement has actually been negotiated.

    The final option USA Today covered was bankruptcy -and that was also the option suggested by Weston in the MSN article because, as she said, “even if you desperately want credit counseling to work, it often won’t.” While filing for Chapter 7 or Chapter 13 might indeed be “a last resort,” as USA Today referred to it, the truth is that it still remains the safest and surest way for many Americans to get a fresh start on their finances.

    How many of these types of debt relief have you tried? What was your experience?

    Benjamin Brand Services – Chicago bankruptcy lawyer

  • Madigan Should Not Settle Until Robo-Signing Really Ends, County Recorder Says

    Winnebago County Recorder Nancy McPherson is one of a dozen county recorders collecting evidence of mortgage document fraud for Illinois Attorney General Lisa Madigan, and she told the Rockford Register Star in a story published on November 15, 2011, that she believes she has found evidence that “robo-signing” is still rampant in the Rock River Valley area. McPherson’s office found hundreds of apparent forgeries in a small sample of foreclosure document and she told the Register Star that she has noticed a greater number of mortgage modification documents. “We’re telling the attorney general not to settle. They haven’t fixed the problem yet,” McPherson said.

    The settlement to which McPherson is referring is the rumored agreement the banks have been working with the federal government and 50 state attorneys general on for months. The New York Times reported in October that a possible settlement as high as $25 billion could give $1,500 to any borrower who lost a home to foreclosure since September 2008. That amount, however, is seen as being too generous for those whose foreclosure was done properly, and an insult to the wrongfully evicted.

    As our colleagues at the Northwest Chicago bankruptcy firm of U.S. Law Attorneys, Ltd. noted when discussing robo-signing last month, “anyone who thinks they are a victim of such illegal practices have competent and experienced foreclosure attorneys representing their interests.” There is no telling when a settlement will be reached in regards to the robo-signing scandal or who exactly will benefit, but it appears that after a brief slowdown, more homeowners will soon begin looking for foreclosure help .

    Would you be satisfied with a $25 billion settlement in this case? Or do you agree with McPherson that the state attorneys general should be holding out until the problem is fixed? Share your thoughts with our Chicago bankruptcy attorney.

    Benjamin Brand Services – Chicago bankruptcy lawyer