Debt Settlement

Many consumers seek help from credit counseling organizations in managing their debt and/or “repairing” damaged credit. But as the demand for credit counseling has increased, the nature of these agencies has changed, and many credit counseling agencies do not have your best interests at heart. Federal regulation of the credit counseling business is fairly loose and state regulation is generally ineffective, which means that you must be very cautious when contracting with a credit-counseling agency. Many consumers seek assistance to educate themselves and do the right thing by addressing their debt problems only to be taken advantage of by consumer credit counseling services that promise credit repair, reduced payments, and miraculous results in an impossibly short time frame. As the saying goes, if it seems too good to be true, then it probably is. Not only might these counseling services not help, they can actually increase your indebtedness. Many people trying to avoid bankruptcy are unaware that credit counseling also reflects negatively on your credit report.

Which is the better choice, credit counseling or bankruptcy? To use a credit-counseling agency to help you pay your debts, you must have the income to do so. You must make a payment each month to the agency, which will then pay your creditors. However, if you miss a payment any one creditor can refuse to continue in your plan and all your creditors may not agree to participate in the plan to begin with. Also, the plan usually requires that all debts be paid in full. In comparison, in a Chapter 13 bankruptcy, depending on your income and expense you may pay only a small fraction of certain debts (non-priority unsecured debts).

If credit counseling is not working or has turned out to be different than advertised, then you are not alone. Consumers nationwide have been misled into credit counseling programs that are expensive, unenforceable under state and federal law, and damaging to credit ratings.

If your credit counseling program is simply not working or if you need information so you can choose between credit counseling and bankruptcy protection, contact us today via email or at (214) 740-1160 for a free, no obligation consultation at any of our Dallas area offices.