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Chapter 13 or 7 bankruptcy may help ward off debt collectors

Debt collectors are in contact with numerous Illinois residents on a daily basis. Dealing with people wanting money when one doesn't have any can be stressful, to say the least. Chapter 13 or 7 bankruptcy may help ward of debt collectors and -- if approved -- give petitioners financial relief. But what about other debt relief services? Are any of them legitimate?

In another state, five people were recently charged for taking part in a debt collection scheme. All five individuals involved have been charged with grand theft, money laundering and false advertising -- among various other felonies. They are said to have collected over $100,000 by claiming to offer debt relief services to those struggling economically. The services were never provided.

Is losing one's home a foregone conclusion of foreclosure?

Numerous Illinois residents are struggling financially right now. For some, money problems are bigger than they are for others. Those who are in really bad shape may be facing foreclosure. Does that mean that they will, without a doubt, end up losing their homes?

Foreclosure is the process lenders use to take control of a property for which they are not being paid. This process can take months or it can take over a year. It just depends on how motivated the lender is and how fast they want to get their money.

Rebuilding your life after a bankruptcy

After going through a personal bankruptcy, you and other Illinois residents probably have many questions about how to get your financial life back on track. Will you be able to buy a home or car in the near future? When can you get a credit card? Is it even a good idea to get a credit card after a bankruptcy? The answers may be more favorable than you think.

A personal bankruptcy stays on your credit report for 10 years, but that does not mean your life should be on hold for that long. In fact, wise borrowing and spending choices can help you start rebuilding your credit immediately after your Chapter 7 or Chapter 10 bankruptcy.

  • Start saving for an emergency. If you regularly set aside a small portion of your paycheck, you may avoid getting further into debt. If you have an unforeseen car repair or doctor bill, it can give you immense peace of mind to pay it with your emergency fund.
  • Consider getting a secured credit card. Many lenders are willing to extend credit to those recovering from a bankruptcy because they know another bankruptcy cannot be filed for another eight years. A small line of credit can help your credit score if you charge small amounts and pay off the balance each month.
  • Pay your bills on time. Paying your bills responsibly, including your monthly utilities, has a significant impact on your credit score.

Illinois Chapter 13: Phantom debt or is it?

Getting calls from debt collectors about a debt of which one is not aware can be really disturbing. Unfortunately, it happens all the time. How does one know if it is the real deal or if a scammer is just trying to take advantage? There are some ways to find out, and if it is really owed, Illinois residents may turn to Chapter 7 or Chapter 13 bankruptcy if they need help addressing it.

How does phantom debt even happen? There are two ways: the information debt collectors have is out of date or it is a scam. In either case, getting collections calls to stop can be tough.

Too many Illinois residents have credit card debt

The vast majority of Illinois residents have some type of debt. Mortgages, student loans, auto payments -- they all seem to be a common part of life for most these days. But there is one type of debt in particular that is becoming more common and a plague on Illinois families and that is credit card debt.

This is not just a problem in Illinois; it is actually a nationwide issue. According to a recent report, approximately 28 percent of Americans carry some level of credit card debt. Of those individuals, 43 percent of them have carried their balances for two or more years. With interest rates at an average of 16 percent on most credit cards and most people only paying the minimum balance due every month, it may feel impossible to pay the debt back.

How is probate handled when there is no will?

A will is the most basic estate planning document available for Illinois residents. Unfortunately, it is not something that all adults have in place for when it is needed. When a loved one dies and does not have a will or other estate planning documents prepared, how will probate work?

There is nothing easy about losing a loved one. However, in the midst of one's grief, there is a need to handle that individual's estate. When it is found that there is no will or no preparations already in place, this can make the whole thing harder to bear. Probate will be necessary and it may take much longer than usual to get through, depending on the complexity of the deceased's assets.

Chapter 13 or 7 may be appropriate when dealing with medical debt

Medical debt is something with which many Americans struggle. For some individuals in Illinois and elsewhere, the amount of medical debt owed may be so much that they cannot possibly pay it back under their current financial situations. For these individuals, Chapter 13 or 7 bankruptcy options may be appropriate ways to seek relief.

A lot of hospitals and medical providers will try to be understanding when it comes to paying back medical bills. Many offer payment programs, with or without interest or financial aid. However, leniency only lasts so long. It is not uncommon for providers to pursue legal actions in order to collect the money owed them. Some may even sell the debt to debt collectors who may then use legal means to collect.

Credit card debt tends to grow during emergency situations

Everyone has unexpected expenses that pop up. Not everyone has the money to cover those expenses, however. When this happens, many people in Illinois and elsewhere may find themselves using their credit cards for more than they normally would. This in turn may lead to credit card debt that can quickly grow out of control.

According to a recent report, most Americans lack the funds to deal with an emergency situation. In fact, half of Americans cannot even come up with $400 to cover a relatively minor emergency. Studies from the Federal Reserve suggest that the average middle class family with an income of roughly $50,000 annually only has enough money saved to survive for days. Why?

The dark side of 0-interest credit cards

If you are one of many who has received offers for zero-interest credit cards, you may be asking yourself if opening one would help or harm you in the long run. Typically, these cards allow you to make credit card purchases without paying interest for a predetermined amount of time, after which you must start paying interest.

As you might imagine, credit card companies are unlikely to have a product that is not going to make them money in the long run, and this holds true when it comes to these zero-interest credit cards. If you think they sound too good to be true, you may be right. Unless you have complete trust in your ability to pay off the card in its entirety before the end of the promotional period, you may be remiss to open one at all, and here is why.

Beware credit card debt when trying to rebuilt one's credit

Credit scores can be complicated to figure out. Big and small things can have a negative impact on your score. In order to rebuild your credit after a significant drop, it is recommended that you use credit cards. However, Illinois residents need to beware credit card debt in the process.

Rebuilding credit is like walking a fine line. One misstep can have serious consequences, and getting things back on track can take time. It can all be rather frustrating, to say the least.

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