What is the Average Consumer Debt Per Person?
Since 2020, the average consumer debt per household has increased to over $100,000. Even a slight increase tremendously impacts families who live hand to mouth. Even more troubling, in 2021, prices increased faster than wages. When that happens, something’s gotta give. That “something” is usually credit card payments and, in many cases, home mortgage and other secured debt payments.
Almost everything in life is negotiable, including debt repayment terms. But individuals have little bargaining power. Working with a debt consolidation company often hurts credit scores almost as much as filing bankruptcy. Such a partnership is basically an admission that the debtor is in over his/her head. In contrast, a Chicago debt reduction lawyer can push the right buttons and work out an agreement that protects your family’s financial future.
To reduce the average consumer debt per person, a Chicago debt reduction lawyer needs leverage during negotiations. Any evidence of fraud, equitable appeals, and/or a bankruptcy filing threat usually create the needed leverage.
Before 2008, lender fraud and mortgage fraud were very common. If their statements or actions convinced people to borrow money, banks said and did almost anything. The financial crisis shined a spotlight on these activities. Previously, such actions were only technically illegal. Now, in the eyes of many, they’re illegal and immoral.
So, any substantive evidence of fraud backs a lender into a corner. The evidence might not be strong enough to win a case in court, but it’s almost always strong enough to win a case in the court of public opinion. In the context of debt reduction negotiations, the second court is usually the only one that counts.
On a related note, many lenders market themselves as friendly and helpful banks that work with people who have financial needs. Attorneys hold their feet to the fire and help ensure that bankers put these lofty principles into action.
Bankruptcy is the nuclear war threat in debt reduction negotiations. Banks are well aware that if the consumer files bankruptcy, the bank has little or no chance of collecting an unsecured debt, like a credit card. Collecting secured debt arrearage, like past-due mortgage payments, is very difficult as well.
Many consumers don’t want to file bankruptcy, for various reasons. But, the bank doesn’t know that the filing threat is an empty threat.
People who file bankruptcy get a fresh start. Non-bankruptcy debt reduction negotiations don’t result in fresh starts, but they usually have life-changing benefits.
Especially if an attorney uncovers evidence of fraud, which is basically making a false statement of a material fact to make money, UPB (unpaid principal balance) reduction may be available. In these cases, non-bankruptcy debt negotiations are more like pretrial settlement negotiations. The bank knows what’s coming next if it refuses to make a favorable deal.
Other relief, such as a lower interest rate and late payment forgiveness, is usually available as well, regardless of fraud evidence. A half-point reduction on a home loan interest rate could save your family thousands of dollars a year. The late payment forgiveness is usually late payment deferral. Many banks agree to roll past-due amounts back into the UPB or defer past-due payments until the end of the loan repayment period.
These results, however modest they may be, put your family on much better footing. So, when the next financial storm, like a job loss or a divorce, arises, you’re in a position to weather that storm.
Count on a Tough-Minded Cook County Lawyer
No matter what kind of financial problem you are having, there’s a way out. For a free consultation with an experienced debt reduction attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.