Credit Counseling Lawyers

Debt Relief Counseling from Experienced Lawyers

Credit Counseling Lawyers can help when you’re suffering from financial setbacks and finding it hard to pay off their debts. They can help you can gain control of an untenable financial situation, which helps relieve the stress that goes along with it.

Consumer debts affect people from all walks of life. While there are various ways to deal with mounting debts, many people look to the easiest solution—credit counseling. It is a program that helps educate individuals on paying their debts. Leinart Law Firm provides free debt relief consultation, so people can manage their finances and thereby resolve their credit problems.

Our clients are given options to decide which plan is best suited for relieving their debts. The benefit of debt relief counseling is that it allows consumers to negotiate with their creditors through the mediating efforts of experienced credit counseling lawyers, which consequently lowers their payments as well as interest rates.

Helpful Information About Credit Counseling

How Credit Counseling Works

Consumer credit counseling provides help to people who have credit problems and cannot seem to get out of them. One of the services that it provides is debt management. Credit counseling lawyers can examine various debts and try to find the best way to implement debt relief solutions that have real results.

Part of debt management is negotiating with creditors. Since credit counseling lawyers aim to free the client from all debts, this might include negotiation with the creditor by creating a settlement to reduce the amount of debt so that the individual can start paying it off within a specified period of time. This option saves both time and legal fees as the lawyer can help stop the damage to the individual’s credit score.

Once the debt has been settled, part of the services of credit counseling lawyers is to help their clients create a sound and sustainable budget plan. The budget plan that they provide might be tighter than ordinary household budgets, but they are designed so that individuals can eliminate their debts while also inculcating a sound habit of saving money. At the extreme end of the spectrum, the debt relief attorney might take on measures such as selling a property to pay off some debts, but this only happens on rare occasions.

If your debt solution is to file a bankruptcy case, you will have to complete the credit counseling requirement. This is also something that debt relief lawyers can help you prepare for.

Credit Counseling in Texas

The Texas economy generates around $1.65 trillion annually, making it the second-fastest job rate in the country. Unfortunately, most Texans have the lowest credit scores and the highest identity theft in the nation while the consumer debt is averaged at $26,250 per adult individual. To increase the financial protection of the local residents, the Texas legislature enacted laws to work with the federal law.

One of them is the Texas Debt Collection Act that protects citizens against unfair collection practices. Another law that was implemented is the four-year statute of limitations on debts wherein debt collectors cannot sue individuals in an attempt to collect debts that are more than four years overdue. Lastly, Texas law limits the interest rate of credit cards to 18% and requires that rates be periodically reevaluated. Texas aw firms that offer credit counseling should know these laws and use them to the advantage of their clients.

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. Law firms that provide credit counseling in Texas offer different types of services aside from debt management. These include debt consolidation, debt settlement, and debt negotiation.

When choosing a firm that offers credit counseling in Texas, it is important to check with the Office of the Consumer Credit Commissioner to check whether they are a licensed credit counselor. It is also crucial to ask the kinds of services that they provide to know if they can give you the appropriate help you need.

What Does a Credit Counselor Do?

There comes a point when you know you have to do something about your debt but you are having a difficult enough time juggling all the different payments, fees and late charges while keeping up your basic living expenses at the same time. At Leinart Law Firm, we understand your frustration and can help you figure out whether you might be a good candidate for credit counseling. Exactly what does a credit counselor do? We take on a variety of tasks, helping you work your way towards financial freedom.

How We Can Help You Fix Your Financial Problems

What does a credit counselor do to get you started? We collect all of your financial information regarding your debtors and creditors and assist you in figuring out where your priorities should be focused based on financial impact. We break down your options as to what you can afford and how to best disburse your money. A counselor contacts your various creditors and debtors and works to negotiate lower, more manageable payments for you at interest rates that will likely be lower than you had originally agreed upon. This allows the debt to be paid at a quicker rate.

What does a credit counselor do in regards to reducing the various payment dates? We combine all of your debt together into one lump sum so you can pay once a month with a total expenditure less than you had paid prior to contacting us. The goal is usually for you to try to pay it off within three to five years.

Bankruptcy vs Credit Counseling

If you have gotten to the point that you feel as though you are swimming in debt – and possibly drowning – it is time to look seriously at your options. At Leinart Law Firm, we understand how important this decision is for you and can walk you through from beginning to end. When it comes to bankruptcy vs credit counseling, you need to take a good look at both to see what will work best for your situation.

It’s Important to Be Informed

With Chapter 7 bankruptcy, many of your debts will be wiped out, specifically your unsecured debts such as personal loans, medical bills and credit card balances. Your home or personal residence will likely be left alone, as will your automobiles. It will release you from an array of payment obligations and can greatly reduce financial pressure.

When it comes to bankruptcy vs credit counseling, you will see differences in the fact that, with counseling, you will not be wiping clean your financial obligations, but will be consolidating them. We collect all of your financial information and proceed to contact your debtors on your behalf. We will work towards lowering your monthly payments and interest rates, then combine the remaining amounts into one payment that is lower than you had previously been obligated to provide. It allows you to minimize the confusion that can accompany multiple payments throughout the month. Our counselors can also guide you in creating a budget based on your income and outgoing expenses so you can live within your means.

What Is the “Credit Counseling” Requirement in Bankruptcy?

Anyone filing a bankruptcy case must complete a court mandated “credit counseling” course during the 180 days prior to the filing of your case. In reality, the credit counseling requirement does not involve much in the way of true credit counseling. It’s mostly just an administrative hoop you have to jump through before you can file bankruptcy.

The requirement is included in Section 109 of the U.S. Bankruptcy Code entitled “Who may be a debtor.” It says that:

…an individual may not be a debtor under [bankruptcy law] unless such individual has, during the 180-day period preceding the date of filing of the [bankruptcy] petition … received from an approved nonprofit budget and credit counseling agency … an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted… a related budget analysis.

What Does This “Counseling” Actually Require You to Do?

It is a relatively simple and painless procedure which is almost always done on the internet or by phone – whichever is the most convenient for you. Basically, you provide information on your debts, income, and expenses. After some number-crunching you are usually informed that you do not have enough income to meet your expenses. For your troubles you get an emailed certificate which entitles you to file bankruptcy.

Remember that 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.

What Is Its Purpose, and Does It Serve that Purpose?

The supposed purpose of the credit counseling course was to encourage people to consider other alternatives to bankruptcy. However, that’s not the way it has worked out. As a report of the nonpartisan Government Accountability Office says, in its understated language:

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.

 

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