Alternatives to Bankruptcy
If your main issue is credit card debt, and you have sufficient cashflow to dig out, you may seek the help of a valid and ethical credit counseling organization. The problem is finding one. A true credit counselor (contrast “credit counselor” with “debt consolidation company” or “debt management company”) will charge you a small monthly fee of usually no more than $50.00. In exchange they will act as a middle man between you and your credit cards. They will try to get the interest rates down as low as possible, sometimes to zero and get you moving on a plan that will hopefully get you debt free. The only place that we know of that does this type of work is Money Management International.
Be wary of places that call themselves “debt consolidation” or “debt management” firms. Be wary of places that guarantee you success. Be wary of places that charge you many thousands of dollars to help you. Anyone who watches television or listens to the radio is inundated with ads from these companies who promise the moon, and usually deliver rotting cheese.
Many of these places make promises they can’t keep. We meet with people every week who spent thousands and thousands of dollars with places like these, only to learn that either no work has been done, or they’ve been sued. It’s often in the fine print of their contracts that not only can they not guarantee success, but that even when they are successful, you will likely have to pay taxes on the amount of debt that was forgiven.
Despite what unscrupulous marketers say, you do not have the consumer right to lower your credit card bills. Also, there is no law that was passed by Congress that somehow forces your creditors to negotiate with you.
Sometimes you need neither bankruptcy nor a credit counselor. You simply need to be honest with yourself about your budget and your spending habits. When you closely and honestly examine these things, you may learn that there’s a few hundred dollars each month that you don’t need to spend and that could make the difference between making minimum payments forever as opposed to sending much larger payments and being debt free in a few years.
If you're looking for relief from debt or need to file for bankruptcy, we are here to help. We offer a free confidential, no-obligation consultation to discuss your personal situation. Please call (713) 961-9477 for immediate assistance or to use the form below.