Information About Consumer Credit Counseling in Texas
Information About Debt Relief Counseling
Credit counseling can help when you’re suffering from financial setbacks and finding it hard to pay off your debts. It can also help you 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.
While our lawyers do not provide credit counseling themselves, Leinart Law Firm provides free debt relief consultations, so people can determine their best option to 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. Consumer credit counseling allows consumers to fully analyze their complete financial picture to determine what the best course of action is based on many factors including income, assets, the amount of debt, and personal financial goals.
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. Our lawyers can examine various debts and try to find the best way to implement a credit card debt management plan that has real results.
Once a plan has been put in place to eliminate the debt (either by paying it off, negotiating with creditors, or discharging it completely in a bankruptcy), credit counselors can help their clients create a sound and sustainable budget plan. The debt management plan that they provide might be tighter than ordinary household budgets, but they are designed so that individuals can eliminate their debts while also establishing a responsible habit of saving money.
If your debt solution is to file a bankruptcy case, you will have to complete a consumer credit course before you file and a follow up course during the course of your case. This is also something that debt relief lawyers can help you prepare for.
Consumer Credit Counseling in Texas
The Texas economy generates around $1.65 trillion annually, making it the second-fastest job rate in the country. Unfortunately, Texans have the lowest credit scores and the highest identity theft rates in the nation while the consumer debt is averaged at $26,250 per adult individual.
Lastly, Texas law limits the interest rate of credit cards to 18% and requires that rates be periodically reevaluated. Texas law firms that offer credit counseling and debt solutions 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. Generally, any organization that provides credit counseling in Texas also offers different types of services aside from debt management. These may include debt settlement, debt negotiation, bankruptcy, and advice on credit repair.
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 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.
Credit counselors put together a strategy to help you work your way towards financial freedom. This may include helping you set a reasonable monthly budget and laying down a plan to prevent overwhelming debts in the future.
How Credit Counseling Can Help You Fix Your Financial Problems
While credit counselors do not themselves negotiate with your creditors, they look at your overall financial picture to help you craft a plan to rid yourself of debt and then to increase your credit score and help you work within your budget to keep you on track financially. What does a credit counselor do to get you started? A credit counselor collects 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. Your counselor will break down your options as to what you can afford and how to best disburse your money.
Bankruptcy vs Credit Counseling
If you have gotten to the point that you feel as though you are facing insurmountable debt that credit counseling alone can’t fix, it is time to look seriously at all of 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.
Bankruptcy and Debt
With Chapter 7 bankruptcy, most of your debts will be wiped out, specifically your unsecured debts such as personal loans, medical bills, and credit card debt. 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. However, not all types of debt may be absolved. For example, student loan debt generally cannot be discharged in bankruptcy.
When it comes to bankruptcy vs debt counseling, you will see differences in that 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.
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. 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.”
Speak to a Debt Lawyer and Get a Free Case Evaluation
Financial education is a fundamental component in alleviating consumers’ debt and credit concerns. Therefore, credit counseling is a vital part of helping consumers utilize credit wisely in order to avoid mounting debts and high interest rates associated with loans, credit cards, and other lines of credit.
Leinart Law Firm is dedicated to helping Texans get out of debt, with comprehensive debt and bankruptcy solutions depending on your financial situation. If you’re worried about mounting bills, or you’re struggling with loan repayment or credit card debt, call today for a free consultation about your finances and learn more about state-mandated credit counseling services that can help you get the fresh start you deserve.
Call the Dallas Office: (469) 232-3328
Call the Fort Worth Office: (817) 426-3328