The average credit card balance in the US is now $5,221, and the average credit card utilization rate is 25.6%. This means that the average credit card holder is using more than one-fourth of their available credit.

There are a number of reasons for the increase in credit card debt. One reason is that the economy has been growing slowly, and many people have been struggling to make ends meet. Another reason is that interest rates have been low, which has made it cheaper to borrow money.

High credit card balances are a concern for many people. It can lead to financial problems, such as bankruptcy and foreclosure. It can also make it difficult to get approved for new loans.

If you are struggling with debt, there are a number of things you can do. You can try to reduce your spending, increase your income, or refinance your debt. You can also talk to a credit counselor or a bankruptcy attorney.

There are also a number of government programs that can help people drowning in debt. The Consumer Financial Protection Bureau offers a number of resources, including a debt relief plan tool and a complaint database.

I offer free consultations to help people in the Chicago area get out of credit card debt.  Reach out if you need help!   Call or message today to schedule a free bankruptcy strategy session to learn how you can get a fresh start with a chapter 7 or chapter 13 bankruptcy.

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Leeders Law is a full-service bankruptcy firm that focuses on bankruptcy law. They understand that financial difficulties can happen to anyone.  They strive to help their clients through their financial struggles. The attorneys at Leeders Law have extensive knowledge and experience in bankruptcy law. They are dedicated to providing personalized and comprehensive legal services to each client.

When it comes to filing for bankruptcy, there are several options available. The most common types of bankruptcy for individuals are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy allows individuals to discharge most or all of their debts. Chapter 13 bankruptcy involves creating a repayment plan to pay off debts over a period of three to five years. The attorneys at Leeders Law can help you determine which type of bankruptcy is best for your situation and guide you through the entire process.

Also, filing for bankruptcy can have a significant impact on your credit score and financial future. However, working with a knowledgeable and experienced bankruptcy attorney can help you make informed decisions about your financial situation.  Leeders Law will ensure that you are taking the necessary steps to get back on track and boost that credit score in the future.

If you are considering filing for bankruptcy in the Austin neighborhood of Chicago, Leeders Law is an excellent choice for legal representation. They are committed to providing compassionate and effective legal services to their clients.  They have a proven track record of success in helping individuals and families through the bankruptcy process.

In conclusion, filing for bankruptcy can be a challenging and stressful experience. With the right legal guidance, bankruptcy can provide a fresh start for your financial future. If you are considering filing for bankruptcy in the Austin neighborhood of Chicago, IL look to Leeders Law.  Leeders Law is a reputable and reliable law firm that can help you through the process. Contact them today to schedule a consultation and take the first step towards financial freedom.

Leeders Law offers free phone, video or in-person consultations to those in the Austin neighborhood of Chicago, IL looking for a bankruptcy lawyer.  They offer a fair fee and flexible payment plans based on your situation.  Contact Leeders law today if you are thinking about filing for bankruptcy.

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The immediate effect of a bankruptcy on your credit score will depend on your previous credit history, but in most cases, it can lower your credit score significantly. This can make it more difficult for you to get credit or loans for several years after the bankruptcy, but it is not impossible. You can begin to rebuild your credit by making timely payments on any existing debts and by making an effort to live within your means.

It is important to understand that the negative impact of a bankruptcy on your credit score may not be permanent. Over time, as you establish a positive track record of paying your bills on time and responsibly managing your credit, your credit score will begin to recover. This process can take several years, but with patience and diligence, it is possible to improve your credit score and regain financial stability. In the meantime, it may be helpful to work with a credit counselor or financial advisor to develop a plan for managing your finances and rebuilding your credit.

The bankruptcy case requires you to take two bankruptcy credit counseling courses – one for pre-bankruptcy planning, and one for post bankruptcy debtor education, financial management. Use these courses and the tools provided to emerge from bankruptcy with the skills needed to get back on track and to improve your credit.

Contact me for a free bankruptcy analysis to show you how you can get out of debt and improve your credit.

The post How Does a Bankruptcy Affect My Credit appeared first on Chicago Bankruptcy Lawyer.

Disputing an item on your credit report involves the following steps:

1. Review your credit report: Obtain a copy of your credit report from the major credit bureaus (Equifax, Experian, and TransUnion) and review it carefully for any errors or inaccuracies.
2. Gather documentation: If you find any errors, gather any supporting documentation that can help prove your case. This could include bank statements, billing statements, or other relevant records.
3. Write a dispute letter: Draft a dispute letter that clearly explains the error and includes a request for the credit bureau to investigate the issue. Your letter should also include copies of any relevant documentation.
4. Send the dispute letter: Mail the dispute letter to the credit bureau along with any supporting documentation. You can also submit your dispute online through the credit bureau’s website.
5. Wait for a response: The credit bureau has 30 days to investigate your dispute. Once they have completed their investigation, they will either remove the error from your report or send you a letter explaining why the error could not be removed.

It’s important to keep in mind that the dispute process can take time, so be patient and persistent in following up with the credit bureau if necessary.

We can help you get out of debt to get those credit report balances down to zero. Contact me now for a free legal evaluation about your bankruptcy options.

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Many people hesitate filing for bankruptcy.  No one wants to do it.  But many, should do it.  Making that determination is often the hardest part about filing for bankruptcy.   There are many stereotypes perpetuated by non-filers that dissuade people from seeking the help they desperately need.  Society has put a negative polish on those that have to file for bankruptcy.  In truth, most who file are not doing so to gain the system or to get away with anything.   The most popular reasons for bankruptcy that I see stem from the loss of a job, an injury, or from divorce.    Below I will dispel the top 5 bankruptcy misconceptions I hear.

1. Will I ever get credit again after bankruptcy?

Yes! You will be able to get credit after bankruptcy.   Should you get credit? Well, that’s another story.  My clients are getting solicitations for credit cards and car loans right after they file their bankruptcy cases.  The reason?  Well, lenders know that a debtor cannot file for chapter 7 for 8 years from the date of the previous filing.  They also know that debtors have to take pre and post bankruptcy credit counseling courses.  Finally, they know that debtors don’t want to end up down the same road again, and will be diligent with their future credit too. Once is enough for most debtors.

I’ve spoken to many former clients and with mortgage companies.  Most have said that they are able to get a mortgage in about 2 years after a bankruptcy.   This is to confirm that the debtor is back on track financially.   As with all credit, watch the terms.  Many of those “Bankruptcy OK” ads you see in the paper come with very high interest rates.  So, start small.  Pay off credit card usage in full each month.   That will help you with your long term credit goals.

2. Will my credit score drop after filing bankruptcy?

While it may dip slightly immediately after filing, most debtors find that their credit scores increase after bankruptcy.   We pull credit reports for our clients before we file.  The provider we use gives our clients their current credit score and it also provides a prediction of where the client’s credit score would be within a year after filing.   They take into consideration past credit history, and pre-suppose the debtor will take out small debts and pay on time.

Most predicted scores that I see go UP about 50-100% within the first year after bankruptcy.  Now, results vary.  I am not guaranteeing any certain increase. I’ve seen a few go down (usually those who had nearly perfect credit to start with).  But the likelihood is good for an increase within the first year.  This might be the most popular of the top 5 bankruptcy misconceptions I hear on a regular basis.

3. Will I lose my belongings after filing bankruptcy?

A debtor usually will not lose any assets when they file chapter 7.  State and federal exemptions protect common and necessary assets that a debtor has.   These exemptions do vary, so it is crucial to speak with your bankruptcy lawyer to plan your bankruptcy case.   Often, the attorney can dictate the best time to file.   Bonuses, tax refunds, inheritances and other non-frequent events can cause issues with exemptions.   Your attorney can best advise you when to file and which exemptions you will use as well as steps you can take to maximize your coverage and limit any liquidations.   Don’t go transferring or liquidating assets without advice from your lawyer, as there are rules to prevent this, and bringing those assets back to your case for liquidation!

In the event you have more assets than can be protected, you may want to consider filing for chapter 13.  In a chapter 13, assets are not liquidated at all. You can keep them all.  You need to design your chapter 13 repayment plan to pay back enough of your debts though, to protect these assets.   Your attorney can help to make sure your chapter 13 plan satisfies the liquidation test.

4.  Will my friends and family find out about me filing for bankruptcy?

Generally, most bankruptcy cases go unnoticed by family and friends, unless you tell them!   In most jurisdictions, bankruptcy filings are not published in the local newspaper.  Your attorney can confirm this where you live.   Now, in some major jurisdictions, like Chicago, the bankruptcy court call is published in the local law newspaper, here, it is the Daily Law Bulletin.  This really only contains very minimal information, like the case number, the debtor’s name, and the name of the event/motion along with the moving party’s attorney and the judge’s name on the court call.  The Chapter 7 court call is very short.  Chapter 13 can have a few more.  But, mostly attorneys read these law bulletins, most of the general population does not.

Bankruptcy is public though. So anyone can access case documents at the court clerk’s office or online for a small fee.   But in general, unless you owe someone money (they will get a notice of bankruptcy filing in the mail), the vast majority of people won’t find out about a bankruptcy filing.   Most employers don’t find out unless you tell them why you have to take off work (to attend the 341 meeting of creditors) or to stop a garnishment by notifying them of the automatic stay protection.

5. Can I still file bankruptcy if I am employed?

Absolutely!  While unemployment or non-employment may be a reason people file bankruptcy, it is not a requirement.   To qualify for chapter 7, the debtor(s) must spend nearly all of their current monthly income on their monthly necessary living expenses.   They must also pass the means test calculation.  The means test reviews the income that a debtor and their household receives in the the 6 months leading up to the case filing.  This average income is then compared to the median income for the debtor’s household size and where they live.   When the income is below the median, chapter 7 is fine.

If the average income is above the median, then the debtor has to fill out a budget analysis (the means test) to see if they have disposable monthly income when using allowances and actual expenses.  A debtor who ‘passes’ the means test can file chapter 7.  If they do not, they would have to look to chapter 13 (unless there were special circumstances).   Chapter 13 also is called a wage earners bankruptcy, where you actually need steady income to make the chapter 13 work.  This is usually from employment, but fixed income and household contributions can be considered as monthly income sufficient to support a chapter 13 repayment plan.

File bankruptcy today

In conclusion, having debunked these top 5 bankruptcy misconceptions, only an attorney can give you the best advice about filing for bankruptcy.   Don’t rely on rumors and stories.  Most of these are not true.  Everyone’s case is different, so go get a free consultation to get the best advice about your specific situation.  Just because someone’s aunt filed bankruptcy and did or didn’t have to do this or that, doesn’t mean it will be the same for you.   Sound legal advice from an attorney who focuses on bankruptcy will serve you better in the long run.

I always offer free consultations.  This is why I am always open to questions, before, during and after bankruptcy.  I tell my clients the pros and cons of their case.  I do not like surprises, and I know my clients don’t want any surprises to pop up with their bankruptcy case either.   So come in, I will dispel any of these top 5 bankruptcy misconceptions and other bankruptcy myths you hear, and will guide you to getting a fresh start with a bankruptcy case.

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