Atlanta Bankruptcy Attorney Blog

Banks are trying to sell consumers on a deal that really is too good to be true, according to Atlanta bankruptcy attorneys.

This summer, a new law will go into effect requiring customers to "opt in" to overdraft protection plans offered by banks (previously many banks enrolled customers automatically - often without telling them). Problem is, banks count on overdraft protection to rake in more than $20 billion in fees annually. To try to recoup some money, banks are sending out millions of letters trying to convince - and in some cases, threaten - customers to sign up.

What is overdraft protection? It's a feature that authorizes banks to "loan" you money when you overdraw on your account with a debit card - for a fee, of course. Here's why it might be a feature you can't afford, especially if you're already dealing with debt.

Continue reading "Atlanta Bankruptcy Attorneys Cautious of Overdraft Protection Pressure By Banks" »

What if you had two choices: Pay the mortgage each month, or pay your credit card bill?

In the past, choosing was a no-brainer - put the money towards the roof over your head. But increasingly, Americans are starting to prioritize credit cards, meaning the mortgage gets left by the wayside, according to Atlanta bankruptcy attorneys.

So what's changed? To start, the housing market. With one in every four homeowners underwater on their mortgage - and thus having no equity in their home - paying off a home loan can feel like throwing money away. On the other hand, paying the credit card bill allows us to keep using plastic to cover food, gas and clothes even when we aren't bringing home enough bacon to afford them.

But even though our new priorities make sense under the circumstances, it doesn't mean they're the best - or only - choice.

Continue reading "Atlanta Bankruptcy Attorneys See More Homeowners Default on House Than On Credit Card" »

When it comes to the current economy, there's good news and there's bad news, according to Atlanta bankruptcy attorneys.

First, the bad: Employers eliminated 20,000 jobs last month, way more than economists predicted and enough to send the stock market in a small downward spiral.

Now the good: Unemployment had reached a lower level than expected last month, dipping below 10 percent for the first time in awhile. Furthermore, it looks like credit might be easier to come by. Banks are finally taking a break from tightening their standards and restrictions for loan seekers. Of course, they're not easing up on those new rules, either, but at least things aren't getting worse.

Here's what it comes down to: We can't control the rate of economic recovery, but we can control the way we view the economy. We've got two choices. We can use the current economic state as an excuse for struggling financially, or we can use it as motivation to make our finances better.

Continue reading "Get Ready for the Economic Recovery By Improving Your Credit, Atlanta Bankruptcy Attorneys Say" »

Contrary to homeowner hopes, Uncle Sam's $75 billion mortgage modification program may be causing more bad than good.

Created early last year, the program was supposed to encourage banks to modify loans of the millions of Americans facing foreclosure. Unfortunately, it's managed to permanently modify just 35,000 - a drop in a rather large bucket, when you consider that 15 million U.S. homeowners are underwater, meaning they owe more on their loan than their house is worth. And of the homeowners that did get help, many went into foreclosure anyway since the program only required banks to lower mortgage payments - not to restore any equity.

But the biggest problem isn't that the program is failing - it's that it's given folks a false sense of security. Many homeowners held out hope that the program would save their home, so they didn't take preventative measures that could have stopped foreclosure, such as Chapter 13 bankruptcy. Fortunately, there may still be time, according to Atlanta bankruptcy attorneys.

Continue reading "Atlanta Bankruptcy Attorneys Warn That Government Mortgage Program Is Increasing Foreclosures" »

So you're finally biting the bullet - you've decided to make a habit of saving.

Congratulations! Making the decision to take action is half the battle. Now you're ready to take on the other half - figuring out what to do with those extra dollars.

On Tuesday, we went over how to let go of your excuses and start saving. Today, let's talk about how to get the most bang for your buck. Usually, that means putting your savings someplace where it will earn the most interest. But if you're a newbie to the savings game, let's forget about interest for a minute and talk about debt.

Continue reading "Getting The Most Benefit From Your New Savings Plan" »

You've probably heard it before, but switching to cash instead of credit has the potential to save you a lot of money.

Just to name a few benefits, using cash means you don't have to pay interest, there's no risk of overspending since you're limited to the contents of your bank account and you're more likely to be mindful about spending since you actually see the physical money leave your hands.

But even cash can have its drawbacks - in particular, ATM fees. Sure, it's free to take money out of your bank's ATM, but what about those times when you need to make a purchase but your bank is nowhere in sight? Chances are you head to whatever ATM is nearby, and that will cost you dearly. First, withdrawing from another bank's ATM can result in a fee of $3 or more. Then, your own bank will hit you with a penalty for using a competitor's machine. In the end, taking out just $20 can cost you 25% in interest!

Fortunately, just a little extra planning can ensure that paying cash remains a good deal.

Continue reading "Cash Can Save You Money, If You Use the Right ATM" »

Imagine that you're given the opportunity to transfer debt from your current credit card to one with a 0% interest rate. Seems too good to be true, right?

Unfortunately, it often is. Sure, it looks like the real deal at first glance. The less interest, the less you pay in the long run, right? But, remember, credit card companies didn't get rich because they put the customer first. There's got to be something in it for them - and that usually means fees, according to the Associated Press.

Here's what credit issuers won't tell you in those balance transfer offers.

Continue reading "Transferring Credit Card Debt Can Cost More Than Its Worth, Say Atlanta Bankruptcy Attorneys" »

Credit card companies are trying to reduce their use of paper - but it's not because they want to go green. Rather, they want to hold on to more green.

In the last couple months, credit card issuers have been sending out information about term changes in order to comply with new credit reform legislation, which limits and requires advance notice for the fees they can charge.

Along with notice of higher interest rates and steeper fees for cash advances, I've noticed a much smaller change. At least two of my card issuers are going to start charging me for receiving paper statements -- $1 and $2 each month. Imagine paying that fee for a handful of credit cards - the amount most Americans carry - and you're looking at as much as $100 a year, just to receive statements the way you always have. That's no small change when most folks are already struggling to pay the bills.

Continue reading "Creditors Start Charging Customers for Paper Statements" »

Citibank is giving a few thousand Americans the ultimate Christmas gift this year. Problem is, there isn't enough to go around.

The megabank recently announced it would put foreclosures and evictions on hold for some 4,000 homeowners this holiday, according to MSNBC.com. The break applies to homeowners with Citibank-owned loans and lasts through the middle of January.

It's intended to reduce stress during this already crazy time of year, said a company spokesman. And I'm sure it will for those 4,000 people, temporarily anyway. But what about the millions of other Americans that are on the brink of losing their homes?

Continue reading "Bank Lets Some Homeowners Stop Foreclosure This Christmas" »

With holiday shopping season in full swing, many of us are worrying about whether or not we're putting too much on the old credit card. But soon we might have a different worry - do we have too little credit?

Along with the housing and job markets, consumer credit has shown little sign of recovering since collapsing last year. After years of handing out credit like candy via subprime mortgages, retail stores and mailboxes (I'm not kidding - I know kindergartners who got credit card offers in the mail) lenders are tightening up their belts, giving out credit to only those with the very best credit history.

If spending more than we earned got us into this financial crisis, having less credit going around might seem like a good thing. But the problem is, some credit is necessary for the financial world to go round - and for our economy to recover.

Continue reading "Credit Getting Tighter For Consumers" »

If banks have their way, free checking could become a thing of the past. But we don't have to accept it without a fight.

You know how I discussed the way credit card companies have been hiking up rates in light of the new consumer protection legislation? Since they can no longer charge unfair fees or trick us with sneaky term changes, they're finding other ways to make us pay - i.e., annual maintenance fees and lower credit card limits.

Well, banks seem to be headed down the same path. With Congress discussing some sort of protection against overdraft fees - those sneaky charges banks hit us with when we accidentally charge more on our debit cards than we have in our account - banks are starting to look for other sources of income. After all, most of their profits these days come from fees, not lending. And their latest source of money is the monthly maintenance fee.

Continue reading "Atlanta Bankruptcy Attorneys Wonder What Happened to Free Checking" »

Sometimes it seems like credit card companies are out to get us. Especially when they do something like, oh, increase their interest rates, fees and minimum payments right before the holidays.

Call it a downside to the new consumer protection laws. Lawmakers limited the unfair fees they could charge, so creditors are finding new ways to take our hard-earned money. But in one respect, credit card companies are actually doing us a favor.

Previously, many companies charged ultra-low minimum payments - sometimes as small as 2%. While it was meant to look like a good deal for the consumer, it was actually a better deal for the creditor. The smaller your payment each month, the less you pay towards the principal. The less you pay on the principal, the longer you'll keep paying. But that's changing. With an unstable economy and a rise in customer defaults, credit card companies are deciding they want their money ASAP.

Continue reading "Atlanta Bankruptcy Attorneys Explain How Increasing Minimum Payments Can Work in Your Favor" »

For every two steps forward, credit card companies just have to take one step back.

You've probably already heard about the new credit card legislation going into effect to protect consumers from hidden fees and unfair rate hikes. As of February, that means no more double-billing cycles. No more confusing fine print. No more raising your interest rate unless you're at least 60 days late on a payment - and even then, restoring your original rate if you prove that you can pay your bills on time.

That's the good news. The bad news? Creditors say that they'll have to make up for their lost income by punishing all of their customers - good credit or not - with annual fees and higher interest rates. And they mean business. Bank of America recently announced plans to test a $29 annual fee on its rewards cards.

Continue reading "Creditors Add New Fees Before Card Reform Takes Effect" »

Imagine this: Just when you thought money couldn't get much tighter, you receive a notice from your credit card company - they're lowering your lifeline, i.e. your credit limit, even though you've been working your butt off to get a good credit score. Sound like a bad dream? It's not.

At least 33 percent of credit card holders had their credit limit cut between October 2008 and April 2009, according to a recent FICO study. And the majority of those people had good credit.
So how can companies justify limiting your line when you've been paying the bills on time and following all their rules? They'll tell you that it's about risk. With more folks than ever defaulting, they're lowering limits across the board.

Now, a reduced limit is both good and bad news. First, the bad. Obviously, your new number is going to be easier to exceed. But you don't even have to overspend to damage your credit. See, one of the things credit bureaus judge you on is debt-to-limit ratio - how much you spend each month compared to your limit. If you have a $5,000 limit and you spend $2,500, then you're using up half of your available credit - a 50 percent ratio. But if your limit gets lowered to $3,000, your ratio automatically shoots up to 80 percent even though you're not spending a dime more. And that makes you a higher risk.

Continue reading "Atlanta Bankruptcy Attorneys Find That Less Credit Can Help You Keep More Money" »

Too little, too late might be the best way to sum up the $75 billion government initiative to reduce foreclosures by encouraging lenders to modify loans.

Obama's plan certainly meant well - and to be fair, it did help some folks - just not everyone. The plan recently reached its goal of helping 500,000 troubled homeowners by Nov. 1. Sound like a success? Maybe not when you realize Uncle Sam had set out to help 4 million foreclosure-bound homeowners. That adds up to a success rate of just 12 percent. And there are a couple other things to consider. First, there are millions of other homeowners who face foreclosure, but wouldn't have qualified for the plan. And second, even the lucky 12 percent able to modify their mortgages aren't free and clear yet. About half of them will redefault on their loan - even after it's been modified.

See, loan modifications just address the most obvious part of a homeowner's financial problems. You can't afford to pay your mortgage, so your lender makes it a little lower. But that doesn't address the reasons behind your inability to pay the mortgage.

Continue reading "How Bankruptcy Can Stop Foreclosure, No Lender Approval Needed" »