• Four Things to Remember About FTC Rules on Debt Relief

    According to an October 23, 2012 WVTM-TV article, it has been two years since the Federal Trade Commission (FTC) implemented new rules regulating the debt relief industry. WVTM noted that consumers are carrying $864.2 billion in revolving debt, and the average American with credit card debt owes more than $15,500. The Federal Reserve says the total household debt in the United States is $11.4 trillion.

    While the FTC changes were good for the many consumers who need help with debt, WVTM pointed out four things to know when seeking debt relief:

    1. Know what debt settlement is – Debt settlement plans can sometimes reduce total principals owed by about half, and the programs generally take two to four years to resolve a consumer’s debt. While WVTM wrote that debt settlement “can be helpful for individuals who are unable to make minimum payments on credit card debt ,” consumers must remember that debt settlement companies often engage in abusive practices. These abuses led Illinois lawmakers to pass legislation in 2010 that banned charging upfront fees for helping consumers negotiate relief from creditors. In July, one Chicago based firm agreed to refund $2.1 million after Illinois Attorney General Lisa Madigan said the lawyers were a “front” to collect hefty fees from desperate consumers.
    2. Understand the FTC rules – The FTC rules “require debt relief companies to renegotiate, settle or reduce the terms of at least one debt, with the consumer’s agreement, before collecting fees from the consumer.” (WVTM.) The FTC rules also define the advertising claims these companies can make. WVTM pointed out that debt settlement companies need to disclose how long it should take to see results, program costs and any negative consequences that may result.
    3. Know where to finding a debt settlement provider – WVTM noted that it remains legal for debt settlement companies and law firms that do not participate in telemarketing to charge up-front fees. The article recommended looking for a firm that is a member of the American Fair Credit Council (AFCC), which “enforces the strictest code of conduct in the industry,” according to WVTM.
    4. Proceed with caution – “Consumers should look for a firm that has an established, long-term record of successfully getting results for customers,” WVTM said. The article cautioned that impatient debt counselors, high-pressure sales tactics and claims that sound too good to be true are all “warning signs of firms that should be avoided.”

    If you are among the many households carrying thousands of dollars in revolving debt, you should know that filing Chapter 7 bankruptcy may allow you to discharge all of your unsecured debt in a matter of months. You can also catch up on late mortgage payments or reduce your mortgage principle by filing Chapter 13 bankruptcy . Both chapters can be safer alternatives to debt settlement programs, and our Chicago bankruptcy lawyers can tell you which plan would work best for you when you contact our firm at (866) 930-7482 or fill out the form on this page.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Illinois AG Calls Attention to Foreclosure Assistance Programs

    This astonishing interactive map from WNYC uses data from real estate information company RealtyTrac to display foreclosure rates by county across the United States. You can press play to see how the foreclosure rate increased between January 2007 and July 2012, with the darker colored dots signifying higher rates of foreclosure. If you zoom in on Illinois, you can see a significant increase in the number of dots statewide during the five years, but you will also notice that the colors in the Chicagoland area are the darkest for nearly every single period.

    On October 4, 2012, the Chicago Sun-Times published an op-ed by Illinois Attorney General Lisa Madigan entitled, “How to find foreclosure help .” “As Illinois attorney general, tens of thousands of Illinois borrowers have reached out to my office for help navigating the bewildering and frustrating experience of trying to save their homes,” Madigan wrote. “Sadly, thousands more never call for help.”

    Noting that “legitimate help won’t come looking for you,” Madigan said homeowners in foreclosure or trying to prevent it should be aware of the following options:

    • Housing counseling agencies certified by the US Department of Housing and Urban Development (HUD) – “Housing counselors can help you understand your options and work with you and your bank to achieve the best outcome,” Madigan wrote.
    • Home Affordable Modification Program (HAMP) – This federal program offers loan modifications and other forms of assistance to homeowners who are employed and behind on their payments.
    • Home Affordable Refinance Program (HARP) – Another federal program, which helps homeowners refinance into a new loan with more affordable payments if they are current on payments but unable to secure traditional refinancing because they are “underwater.”
    • Illinois Hardest Hit Fund – A program providing payment assistance to homeowners who lost their jobs and are behind on their payments.

    Foreclosures remain a problem for thousands of homeowners throughout Illinois, and we will continue to discuss this issue throughout the week. If you are facing foreclosure, you should know that another option is filing Chapter 7 or Chapter 13 bankruptcy . You could delay the process by filing Chapter 7 , or a Chapter 13 repayment plan may even be able to help you save your house. Our Chicago bankruptcy attorneys can help when you complete the form on this page or contact our firm today at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy lawyers

  • 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