Illinois Bankruptcy Lawyer Blog

Credit Report Information Graphic

I harbor no love for The New York Times, which I consider to be arrogant, liberal, and self-satisfied. But I have to give credit where credit is due. The Old Grey lady has managed to capture the dramatic story of America's post-war economic rise and fall in these chilling graphics.

 I would have thought the Wall Street Journal or The Economist might have done it instead, but there you go. 

And the numbers tell us we've gotten ourselves into a real mess. Although naturally the Baby Boomers - America's spoiled children - rode the fat part of the curve in the 50's and 60's,  leaving ensuing generations to foot the bill. How typical.

Welcome to the 21st century's Lost Generation.

According to the American Bankruptcy Institute, interpreting the data supplied by the National Bankruptcy Research Center, the number of consumer bankruptcies filed last month was 11% lower than it was last year. That fact is also consistent with the 2011 trend of fewer new filings each month than in the same month of 2010.

All of which sounds promising until we remember that last month 113,432 Americans still had to file bankruptcy to ward off severe financial turmoil, much of it due to their upside down mortgages and ever-sinking home values: trends that have not changed in 2011.

According to ABI Executive Director Sam Gerdano, consumer bankruptcies are declining due to the deleveraging of credit card accounts by consumers and the fact that new credit is so hard to get. 

Again I ask: how is that good news? No new credit? What if you need new appliances? A new vehicle? What if you are in a once-in-a-lifetime cash crunch? I guess it's alright as long as it's some else's pain. 

But hey, at least the August filings represented a 1% decrease from July. I know, I'm not that impressed either. Hey O'Bama, where's your messiah now? But seriously... the President had better do something or he'll end up as a one-term-wonder.

This article in CNNMoney identifies 9 credit cards industry experts told CNNMoney were among the worst in America for nose-bleed interest rates and ridiculous fees. Here's the list:

1. Applied Bank Unsecured Visa Gold Card
2. First Premier Bank MasterCard
3. Baby Phat Prepaid Visa RushCard
4. Hooters MasterCard
5. The Shack Credit Card
6. Shell Select Member Card
7. Visa Black Card
8. JCPenney Rewards Credit Card
9. Household Bank Premium Platinum MasterCard

An editorial by Rafia Khader, Law Clerk, M. Hedayat & Associates, P.C.

Bankruptcy is a trying situation for any individual. But for women it seems as if the laws yet again disproportionately burden them. I came across an interview with Harvard Law Professor Elizabeth Warren a while ago that was both shocking and predictable. In it she said that changes to the bankruptcy law made in 2005 (oh those again!) made it much harder for women to make ends meet.

Before 2005 women dependent on domestic support from their ex-husbands were able to collect such payments with full confidence because declaring bankruptcy meant that the ex-husband's debts, excluding domestic support obligations of course, would be wiped out. But no, the credit card companies didn't like that! Why should ex-wives be able to collect the ex-husband's money and not they! The injustice! So in 2005, they had the laws changed. Today, discharge of credit card debt is not necessarily guaranteed and women are, as Warren says, in 'direct competition' for the ex-husband's resources. Thanks, credit card companies!

But perhaps what is most truly startling are the statistics from theU.S. Women's Chamber of Commerce. A study found that women were 32% more likely to have received supbrime mortgages than men. And that's irrespective of income! Women were also 41% more likely have received higher cost subprime loans for their businesses. And we all know what suprime means. Thanks, Wall Street!

Sure, these statistics don't establish any type of causal relationship and you can't really blame credit card companies for ruining women's lives (there are other institutions in places that have contributed to that), but the bottom line is this: women definitely do have it tougher. But of course I am a woman and I would say that.

But I am also right.

RK

This past Monday, President Obama delivered a speech urging banks bailed out by the Troubled Asset Relief Program (TARP) to start lending on a wide scale basis again.

Translation: it's about time the banks pay back the millions of taxpayers who helped them survive.

Immediately following, Bank of America stated that it would increase its lending to small and medium-sized businesses by $5 billion. With $41.9 billion in outstanding business loans as of September, Bank of America is currently the second largest small business lender.

Let's see if other TARP recipients heed the President's message and follow suit.

Source: CNNMoney.com

We would have accepted either C-I-T or A-D-V-A-N-T-A as a correct answer

As reported all over the Web, including this story by CNN, credit card overlord and perennial heavy-handed creditor Advanta filed for Chapter 11 bankruptcy protection a few days ago - just one week after CIT Group, a top secured lender to small business, did the same. Both lenders experienced (ha!) a sharp rise in defaults. Welcome to the world of the consumer. Personally I hope that their creditors show them no mercy. If the Bankruptcy System is to work then it must be an equal handicap for large and small. If Advanta or CIT are reconstituted through Chapter 11 I can only hope that this time the intention is to help small business and business owners - not to hound them to death as both creditors are famous for.

Q: I"m being sued by collection agency regarding my ex husbands debt. Should I retain an Attorney?

A: The short answer would be 'No' if the debt really belonged exclusively to your ex. In all likelihood however, the credit card in question must have included your name as an authorized signatory or co-debtor. In any event, you should take such a lawsuit seriously - under no circumstances should you ignore any suit in which you are named as a defendant (whether correctly or incorrectly).

Have a question? E-mail us at mhedayat@mha-law.com.

This chart was complied and published by Visual Economics