Atlanta Bankruptcy Attorney Blog

Faced with sky-high interest rates and increasing fees, many consumers are giving up credit cards in exchange for debit.

Like credit cards, debit cards are convenient - they don't require a trip to the ATM, don't involve making change, and make receipts obsolete since you can usually track your purchases on a bank statement. But they're also free of the major drawbacks of credit. Most importantly, they won't drag you down with that dreaded interest. And because you're limited to the money in your bank account, they don't encourage overspending like credit cards do. In fact, they're an excellent tool if you're trying to reduce your reliance on debt.

Debit cards almost sound too good to be true. And they actually can be if you're not careful. See, banks just had to find a way to make money off this new phenomenon - you didn't think they were going to let you get away with anything for free, did you? So they started quietly enrolling customers in an overdraft protection program.

Continue reading "Choose Debit Over Credit, But Be Wary of Overdraft Protection" »

We've all heard the saying when life gives you lemons, make lemonade. Well, how about this one: when credit card companies give you higher minimum payments, make the decision to reduce debt for good and find a financially-secure future.

OK, so it doesn't quite have the same ring to it as the old lemonade adage. But it's the same idea. When life throws you a curveball - something seemingly negative - find out how to use it to your advantage.

Credit card companies have been raising minimum payments to help defray the costs of increasing defaults and to offset new regulations. At first glance, a higher minimum seems like bad news. But it's really not. See, credit card minimums have recently averaged about 2%. That means that on a $1,000 credit card bill, you'd only have to pay $20. Not that painful, right? Think again. With an average APR of 15-30%, you're not even covering interest. So not only are you not paying off your principal - the amount of your original purchases - but your balance is actually growing, even if you stop adding to it.

Continue reading "Atlanta Bankruptcy Lawyers See Silver Lining in Rising Minimum Payments" »

There's a longstanding myth that bankruptcy is for deadbeats. But the truth is, most folks who file for bankruptcy have jobs or are actively looking for work. Most can pay some bills. Most are intelligent, responsible, God-fearing citizens. They just need a little help.

If that's not enough to convince you that bankruptcy is more of a financial tool than a form of surrender, how about these famous names - Donald Trump, Walt Disney, and Abraham Lincoln. Each one found success after filing for bankruptcy.

Even baseball teams are not immune. News just broke that the Chicago Cubs are considering a bankruptcy filing. No, the Cubs aren't broke. They still draw 3 million fans to their home games annually. But their owner wants to make sure the team is free from liabilities so a potential buyer won't have to worry about fighting off creditors in the future.

Bankruptcy doesn't have to be a last-ditch effort. It can be a smart strategy.

Continue reading "Famous Folks File for Bankruptcy, Too" »

I learned a lot in college. But the most important school-related lesson came after graduation. I finally figured out how to free myself from the credit card debt I racked up during those four years.

College was where I first honed my bad money habits. And apparently, it's where many others do the same. See, colleges are enablers when it comes to credit. How? By allowing banks to sneakily position themselves on campus - often during sporting events or other celebrations - to recruit students to sign up for credit cards. Just check out this article in the New York Times. I can verify it happens because this is exactly how I signed up for one of my first credit cards sophomore year.

Common sense would have schools discourage credit. After all, if students are drowning in debt, how are they going to afford to pay tuition? But as it turns out, banks give schools a big, fat financial incentive. The more students who sign up for cards, the more profits the college gets. Sometimes, the schools actually get paid to turn over a list of student names.

And it seems to be working.

Continue reading "How to Eliminate College-Caused Credit Card Debt for Good " »

Whether or not we like to admit it, following the crowd is part of human nature. When we're babies, we learn to walk and talk just like Mom and Dad. Growing up, we want the same toys, clothes, and eventually cars as our friends. As adults, we try to keep up with the Joneses by acquiring the latest gadgets and accessories.

Sometimes we imitate each other without even realizing it. Take me, for instance. I've always liked to think of myself as an original - someone who follows her gut, who doesn't bow to peer pressure, who marches to the beat of her own drummer. Until I realized I was a total lemming in one important area of my life - my finances.

My family and friends have always been heavily reliant on credit cards. So, of course, I followed in their footsteps. Up until a few years ago, I basically had a mini-credit card museum in my wallet. Nordstrom, Macy's, Best Buy, Target, you name it. If I shopped there, I had a card.

I also had a lot of debt.

Continue reading "Stand Out From the Crowd to Get Out of Debt" »

When an acquaintance of mine lost her job, her first priority was to continue feeding her kids. Her second priority? To find another job - so she could continue feeding her kids. Needless to say, she spent most of her time searching for work and none too much time worrying about the mortgage.

The good news: three months later, she found a new job (she was a smart, educated woman, so it was only a matter of time). The bad news: she lost her home to a short sale in the process. She stopped making payments and ultimately gave up.

Apparently, her story is becoming more and more common. According to this Washington Post article, unemployment - rather than subprime mortgages - is now the leading cause of foreclosures. Since the unemployed don't have steady income, they're even less likely than most to qualify for loan modifications. And even when they do find work again, they're often unable to catch up on their mortgage because of late fees their lenders levied on delinquent payments.

But it doesn't have to be like that. Bankruptcy is a way to potentially stop foreclosure and free yourself from debt in the process - even if you're dealing with unemployment.

Continue reading "Atlanta Attorneys Say Unemployment Doesn't Have to Equal Foreclosure" »

A new credit card act that's supposed to protect the consumer might be having some unintended side effects.

Here's the deal. Starting in February 2010, credit card companies will become limited in how and when they can charge fees and make terms changes, thanks to the Credit CARD (Card Accountability Responsibility and Disclosure) Act. But does that mean credit issuers are turning over a new leaf and actually caring about the well-being of their customers? Heck no.

Before the new rules go into effect, they're trying to squeeze in some last-minute changes. Most noticeably, more and more folks are seeing their APRs go from fixed to variable, according to this article. Even if you signed up for a card with a fixed rate, companies only have to provide a 15-day notice - less than one billing cycle - to change your rate.

Continue reading "Credit Card Companies Squeeze in Changes Before Consumer Protection Law Takes Effect" »

After 13 years in the public school system and four years of college, I've put in my time when it comes to education. But somehow, seeing the kids head back to school with their new backpacks and notebooks makes me a little wistful.

It's not that I want to return to the classroom (though my grandparents are always hoping I'll go back for my master's). And it's not that I'm looking for an excuse to do some back-to-school shopping - I think I've been doing a decent job of avoiding the mall, thank you very much.

No, what intrigues me most is the potential for change. It's the idea of wiping the chalkboard clean, if you will, for a fresh start. Remember how going back to school every fall meant a chance to reinvent yourself? Well, why can't the change of the seasons mean the same thing now, particularly when it comes to finances?

Continue reading "Educate Yourself Out of Debt with Atlanta Financial Workshops" »

It's official - the Cash for Clunkers program is a hit. But while that might be good news for the ailing auto industry, it's not necessarily good news for consumers.

In case you're not familiar with the program, here's how it works. When you turn in a low-mileage vehicle for one that meets higher-mileage guidelines set by the government, you get up to $4,500 off your purchase. Sounds like a lot of money, right? But not when consider that Cash for Clunkers presents the same problem as the blowout sale at your local discount store.

Let's say you buy a pair of shoes normally priced at $50 for 50% off. You might think you're saving $25 - but that's only true if you planned to buy that pair of shoes no matter what. If you only purchased them because of the sale, you're actually out $25. It's the same thing with cars. If you were dead-set on buying a new hybrid anyway, then yes, you're getting a great deal. But if you're using the incentive as an excuse to get a shiny new toy that you really can't afford, then you're not getting a bargain - in a way, you're getting ripped off.

Continue reading "Cash for Clunkers Might Not Be Such a Good Deal" »

Sometimes it seems like there's no way to win.

Americans are saving at the highest rate in years and paying off debt in record numbers. Recently the Federal Reserve announced that June saw the fifth straight month of reduced credit card debt. It seems like frugality has finally caught on.

That sounds like good news, right?

But some economists fear that all that saving is going to squelch economic recovery. When consumers keep their cash in the bank (or worse, under the mattress), it doesn't get spread around to create more money - at least, that's the economic perspective.

I can see their point. But I think they're failing to take into account some important factors. First, economic growth isn't just about consumer spending. It's about unemployment - which is currently hovering above 9 percent. It's about real estate and the foreclosure crisis. And it's about credit - lest we forget, we might not be in this mess had we not outspent our means.

Continue reading "Prioritize Your Own Economic Health Over the State of the Economy" »