Friday, November 25, 2016

Avoiding Credit Card Debt in Chicago this Holiday Season

Dealing with substantial credit card debt can be frustrating, and it may feel as though you will never be able to get ahead. During the holiday season, many Chicago residents, along with consumers across the country, will spend hundreds and sometimes thousands of dollars on gifts, decorations, and holiday travel. For many families, the additional expenses that accrue during the holidays are beyond their monthly budget. What happens when families do not have the necessary cash to pay for holiday costs? By and large, many of them turn to credit cards. For those Americans who are already struggling with credit card debt, the holidays can be a particularly difficult time.
In some cases, consumers who have unmanageable credit card debts may be eligible for personal bankruptcy. However, consumers cannot simply plan to file for Chapter 7 bankruptcy and, before doing so, rack up additional credit card debt during the holidays. Regardless of your plans for bankruptcy, it is important to consider ways of avoiding additional credit card debt this holiday season.
Costs are High for Holiday Spending, from Gifts to Seasonal Travel
How much do Chicago residents spend, on average, over the holidays? Each year, the American Research Group, Inc. conducts surveys to determine how much the average household plans to spend during the holiday season. According to its fact sheet, last year the average spending per adult totaled $882. That total represents a 2% increase from the previous year, in which the average spending per adult was listed as $861. For some, this might not sound like a lot of money to spend during the entire holiday season. However, this number is the average of spending on Christmas gifts alone. In other words, it does not include purchases for holiday meals, decorations, and other expenses associated with the season.
If the average adult is spending nearly $900 alone on gifts—a number that likely goes well above $1,000 when adding in other costs—how is the average adult paying for these items? According to a recent article in Forbes Magazine, many Americans are swayed by the in-store discounts associated with store credit cards. However, as the article clarifies, these credit cards often serve only to put consumers deeper into debt.
Spending on Credit in Illinois During the Holidays
Last year alone, we mentioned that the average American adult spend $861 on gifts. According to the Forbes article, holiday spending in general “sent the average American $986 deeper into debt.” Many of those debtors decided to use store credit cards in order to receive particular discounts and other perks. In the long run, however, store credit cards may only encourage more spending—of money that consumers do not have—making the small discounts and perks negligible.
Most importantly, consumers need to recognize the different between waived interest and deferred interest. Most store credit cards that offer 0% financing offers during the holidays have deferred interest, which means that all of the interest will come due if you do not pay off the balance within a certain period. Moreover, the APR on a store credit card is typically very high. For instance, a Lowes card “charges a flat APR of 26.99%.” In brief, unless you can afford to pay of the balance in a relatively short period of time, relying on store credit cards to make holiday purchases can set you back further in the long run.
If you have questions about managing consumer debt or filing for personal bankruptcy, an Oak Park bankruptcy lawyer can assist you. Contact the Emerson Law Firm today.
See Related Blog Posts:
FTC Consumer Protection Gains

Friday, November 18, 2016

Recent Foreclosure Rates Show Sharp Increase

For quite some time now, the monthly rates of foreclosure in the Chicago area have shown a general decline. However, according to a recent article in HousingWire, October 2016 saw a substantial jump in the number of foreclosures reported that month. The number rose by 30%, meaning that October of this year showed the “largest monthly increase since August 2007.” If you think more carefully about what that means, the number suggests that foreclosure numbers are looking more akin to those around the time of the housing market crash.
How did foreclosures rise so dramatically in just a single month? And is there actually reason for concern, or are there other explanations for the sharp increase in foreclosure rates?
Are We at the Beginning of a New Foreclosure Crisis in America?
Many consumers might be asking an obvious question about the recently released data: Are we at the beginning of a new foreclosure crisis in America? Generally speaking, experts suggest that it is not yet time to worry. The data cited in the article, which comes from an ATTOM Data Solutions Foreclosure Market Report, indicates that more than 105,000 foreclosure filings, default notices, bank repossessions, and/or bank auctions occurred this October. Yet this number, when we look at what it does to annual percentages, still puts the country at a rate of foreclosure that is around 8% lower than it was at this same time in 2015.
As Daren Blomquist, the senior vice president for ATTOM Data Solutions, explained, “[t]he increase in October isn’t enough evidence to indicate a new foreclosure crisis emerging in these states, but it certainly demonstrates that this housing recovery is not completely devoid of risk.” The states with particularly high rates of foreclosure last month did not include Illinois. To be sure, those listed in the article include Arizona, Colorado, and Georgia.
However, Illinois does come up when we begin talking about the highest foreclosure rates in general (and not only in October). Then, Illinois ranks fourth in the nation, with one foreclosure for every 704 units. It comes in behind only Delaware (with one out of every 355 units in foreclosure), New Jersey (one out of every 564 units in foreclosure), and Maryland (with one out of every 679 units in foreclosure). After Illinois, South Carolina ranks fifth, and experts suggest that Florida likely will make this undesirable list in the near future.
Post-2009 Loans Leading to Foreclosure
Are the new foreclosures connected to older home loans, or are they indicators that more Americans are having trouble affording their mortgages shortly after they obtain them? By and large, the article suggests, recent foreclosure activity is “more heavily tied to loans originated since 2009—after most of the risky lending fueling the last housing boom had stopped.”
What kinds of loans are going into foreclosure? Most commonly, borrowers who have obtained FHA and VA loans that have low down payments seem to be more likely to be at risk of foreclosure than other homebuyers. To be sure, “FHA and VA loans combined represent 49% of all active foreclosure inventory for loans originated in the seven years ending in 2015.”
If you have questions about protecting your home from foreclosure, an experienced Oak Park foreclosure defense lawyer can answer your questions today. Contact the Emerson Law Firm today to discuss your case.
See Related Blog Posts:
More Renters Due to Foreclosure Crisis