Consumer Credit Counseling in Texas

Information About Debt Relief Counseling

  • Credit Counseling is mandatory for anyone filing bankruptcy
  • Get information and tips on credit counseling requirements
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Consumer Credit Counseling in Texas

a poor credit score report

Credit counseling can help you prioritize your finances and learn how to avoid overwhelming debt in the future. Although our Dallas debt attorneys do not provide credit counseling services, Leinart Law Firm provides free debt relief consultations to help consumers find the most effective options to manage their finances and resolve their credit problems. Our experienced credit repair attorneys provide a comprehensive evaluation of your financial circumstances and determine which debt solutions are best suited for your specific situation.  

What Is Credit Counseling?

a couple has a credit counseling appointment with an attorney

Juggling all kinds of payments, fees and late charges while trying to cover basic living expenses is exhausting. There comes a point when you know you have to do something about your debt, but figuring out what action to take can be daunting. Consumer credit counseling provides an opportunity to do a thorough analysis of your finances and determine the best course of action for reducing debt and managing your money more effectively.

What Does a Credit Counselor Do?

a credit counselor types on a calculator at their desk

A credit counselor will go over all of your financial information with you and provide advice on money management, debt management and budgeting.  Each person’s situation is different, and the best course of action is based on many factors, including income, assets, the amount and type of debts you carry and your personal financial goals.

A certified credit counselor helps you put together a strategy to work your way toward financial freedom. They gather and analyze all of your financial information regarding your income, debtors and creditors. They assist you with determining the focus of your financial priorities and break down your options, which will depend on what you can afford and which debt relief solution will be most effective for you. This may include helping you create a reasonable monthly budget and developing a plan to prevent you from accumulating additional debt that could put you right back where you started. Credit counseling is a good option for people who want to reevaluate their spending habits and enter a management plan to pay off their debts.

Once you decide how to handle overwhelming debt, a credit counselor can help you develop a sound, sustainable budget plan. Their recommended debt management plan might be tighter than what you’re used to, but they are designed to eliminate your debts while helping you establish responsible spending habits and saving money.

Debt Relief Options

a dictionary definition of the word bankrupt

There are several ways consumers can find debt relief, including negotiating with creditors to pay off an agreed-upon amount or filing bankruptcy to discharge or restructure debt through a payment plan. If bankruptcy is your best debt relief option, you must complete a consumer credit counseling course before you file bankruptcy in Texas. Our Fort Worth bankruptcy lawyers can help you through the process and recommend reputable consumer credit counseling agencies. If you decide to negotiate with your creditors before considering bankruptcy, our credit repair attorneys can assist you with this as well.

Consumer Credit Counseling in Texas

a Texas law book

The Texas economy generates around $1.77 trillion annually, which makes it the second largest by GDP in the United States. According to Experian, the total U.S. consumer debt balance grew $800 billion in 2020. Unfortunately, Texans still have some of the lowest credit scores and the highest identity theft rates in the country. Although the economy has been significantly impacted by the COVID-19 pandemic, it continues to recover.

Generally, organizations that provide credit counseling in Texas also offer different types of services in addition to debt management. These may include debt settlement, debt negotiation, bankruptcy and advice on credit repair. Because of the pandemic, some creditors are more willing to work with consumers who face financial hardship, so if you talk to a credit counselor, make sure to ask if they’re aware of any programs that could benefit you.

Texas law offers some consumer protections, such as limiting the interest rate of credit cards to 18% and requiring rates to be periodically reevaluated. Federal and state laws surrounding debt relief and bankruptcy change frequently. Our bankruptcy law firm in Dallas keeps up on the latest developments and utilizes the law to our clients’ full advantage.

Identifying Credit Counseling Scams

a scam alert displays on a mobile phone

When choosing an organization that offers credit counseling in Texas, it is important to check with the Office of the Consumer Credit Commissioner to see whether they are a licensed credit counselor. It is also crucial to ask what kinds of financial services they provide to find out if they offer the appropriate help you need.

There are plenty of scammers posing as reputable credit counselors, so make sure to do your research and choose wisely. Any counseling or credit repair agency that claims they can repair your credit or negotiate with your creditors to reduce or eliminate debt is not telling you the truth. Or they may claim they can remove negative information from your credit report even if it is valid. They can’t. If you encounter a supposed consumer credit counseling agency that makes these claims, run the other way and do not give them any money.

Credit repair and debt relief scams can seriously damage your credit and leave you in a worse financial situation than you were before. It’s also important to be aware that legitimate credit counseling agencies are supposed to advise you of the best solutions for your situation — not steer you toward their own programs.

Due to the financial hardships many people have experienced because of the pandemic, these scams are more rampant than ever. That’s why it’s vital to seek the counsel of an experienced credit lawyer who can assess your financial situation and protect your rights and interests.  

How Can Our Debt Relief Lawyers Help?

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Financial security and healthy credit starts with debt reduction. Although consumer credit counseling services play a vital role in helping you utilize credit wisely to avoid mounting debts and high interest rates, certified credit counselors do not negotiate with your creditors or assist you with filing bankruptcy. Our lawyers provide a free case evaluation in which we take a comprehensive look at your income, debts, expenses and assets and determine the best way to implement a debt management plan that helps you achieve your desired results.

Debt consolidation, negotiating with creditors to reduce your debts or filing bankruptcy may be recommended. Although it’s possible to negotiate with creditors on your own, the process can be frustrating and time consuming. Our credit attorneys at Leinart Law Firm know how to strategize and negotiate to maximize your debt relief opportunities.

Filing bankruptcy can also be a complex undertaking. Having an experienced bankruptcy attorney by your side helps ensure all of your legal bases are covered and can take some of the stress and burden off your shoulders.

Bankruptcy vs. Credit Counseling

a row of dice labeled “option 1” or “option 2”

It’s important to take a good look at both credit counseling and bankruptcy to see what will work best for your financial situation. Our bankruptcy lawyers know that understanding the future impact of your financial decisions can be challenging and that these choices are not easy to make. If you believe you are facing insurmountable debt that credit counseling sessions alone can’t fix, there are other options.

We’re here to help sort it all out so you can do what’s best for you and your family. We walk you through your options from beginning to end and break things down using straightforward language that’s easy to understand.  

Filing for Bankruptcy in Texas

a gavel, calculator, and a pen sit on top of a petition filing for bankruptcy

Filing bankruptcy in Texas can relieve you from an array of payment obligations and ease some of the pressure you may be feeling. However, not all types of debt may be absolved. Student loan debt, child support or alimony, some types of tax debt and criminal fines or restitution generally cannot be discharged in bankruptcy. There are significant differences between Chapter 7 and Chapter 13 bankruptcy, so it’s important to understand how each type works.

What Is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy paperwork

If you file Chapter 7 bankruptcy, most of your debts will be wiped out, including unsecured debts such as personal loans, medical bills and credit card debt. When you file bankruptcy, an automatic stay is put on all collection actions, which means your creditors must stop trying to collect debts. If you’re behind on mortgage payments or your home is in foreclosure, this can halt the process and give you time to find a solution. Texas bankruptcy law also provides generous homestead and property exemptions that let you keep your home and vehicles.

What is Chapter 13 Bankruptcy?

a pen sits on top of Chapter 13 bankruptcy paperwork

Sometimes called a wage earner’s plan, Chapter 13 lets consumers with steady incomes create a plan to repay some or all of their debts over a period of three to five years. Although debt consolidation is sometimes recommended in credit counseling, filing Chapter 13 bankruptcy can help you save more on interest, make repaying your debt more manageable and may help you wipe out a significant amount of unsecured debt.

Is Pre-Bankruptcy Credit Counseling Required in Texas?

a row of bankruptcy law books

Anyone filing bankruptcy must complete a court-mandated credit counseling course within 180 days before filing their case. The requirement is included in Section 109 of the U.S. Bankruptcy Code.

What Does Credit Counseling Actually Require You to Do?

a lawyer answers the question “What Does Credit Counseling Actually Require You to Do?” to a couple

The financial counseling you receive before filing bankruptcy is relatively simple and painless. It is usually done on the internet or by phone — whichever is the most convenient for you. You provide the credit counselor with information about your debts, income and expenses. After some number-crunching, you may be informed that you do not have enough income to meet your expenses, which usually means filing bankruptcy is a good solution for you. For your troubles, you get an emailed certificate that entitles you to file for bankruptcy. This certificate must be included with your bankruptcy filing.

The certificate is good for only 180 days from the date of the “counseling” session, so you don’t want to go through the procedure until you know when your bankruptcy will be filed. But you also don’t want to leave it for the last minute, especially if the filing of your bankruptcy is time-sensitive. Your bankruptcy attorney can keep you on track when it comes to these important timelines.

Why Is Credit Counseling Required to File Bankruptcy?

a person is reviewing credit counseling paperwork

The original intent of the credit counseling course requirement was to encourage people to consider viable alternatives to bankruptcy. However, that’s not the way it has worked out, as most people who consider filing bankruptcy are already in very serious financial straits. An excerpt from a report by the nonpartisan Government Accountability Office makes this point quite well:

“The counseling was intended to help consumers make informed choices about bankruptcy and its alternatives. Yet anecdotal evidence suggests that by the time most clients receive the counseling, their financial situations are dire, leaving them with no viable alternative to bankruptcy. As a result, the requirement may often serve more as an administrative obstacle than as a timely presentation of meaningful options.”

Are there Any Other Credit Counseling Requirements?

In addition to getting credit counseling before you file, you must receive debtor education after you file for bankruptcy but before your debt is discharged. Most organizations that provide pre-bankruptcy credit counseling offer this service as well.

Our Dallas Credit Repair Lawyers Are Here for You

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Leinart Law Firm is dedicated to helping Texans get out of debt. We provide comprehensive, personalized debt relief and bankruptcy solutions based on your specific circumstances and goals. Our caring team understands how overwhelming and upsetting these financial issues can be. We treat each client as if they were our only client, and our bankruptcy lawyers provide expert legal advice that you can trust.

If you’re worried about mounting bills or struggling with loan repayment or credit card debt, let us take some of the weight off your shoulders. Our seasoned legal professionals guide you every step of the way and always keep your best interests at the forefront. We’re committed to helping you through these challenging times so you can get the fresh start you deserve.

Contact a Dallas / Fort Worth Credit Lawyer to Schedule a Free Consultation

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To learn more about credit counseling, bankruptcy and other debt relief solutions in Texas, email us to schedule a free case evaluation at Leinart Law Firm today. You can also use our convenient chat feature or fill out the contact form on our website to get in touch. Our Fort Worth and Dallas bankruptcy lawyers serve clients throughout north Texas.