Financial difficulties are extremely common. Even before the Great Recession consumers by the millions experienced often very serious problems paying off bills and making ends meet. Whether this is attributable to a growing carelessness with the proliferation of credit, or to an increase in the cost of goods and services, what is clear is that the problem is severe. If you are facing a financial crisis you may feel that your best option is to seek credit counseling. However, as your College Station bankruptcy attorney will tell you, you need to take care when doing so.
Finding an Easy Solution
One problem that is common to credit counseling agencies is the notion that getting out of debt can be easy and painless. The truth is, however, you need to address the issues that caused you to get into debt in the first place. Perhaps you were a bit too free with running up credit card debt. Or maybe you spent more than you had planned on that room addition.
To be sure, there are many reasons why people fall into massive debt that are not due to mismanagement of credit. During the Recession millions of Americans lost their jobs. Also, healthcare has never been more expensive. Even though we have medical procedures today that have enabled people to recover from what were once certain fatal conditions, these come at a cost. Indeed, medical debt is the number one reason people file bankruptcy today.
The Problem with Credit Counseling
The concept behind credit counseling is actually a good one. A person joins a service and meets with a counselor, who reviews all of his debt. Each month the customer pays a flat amount of money to the service, which then distributes this money as per the plan to each creditor in question. During this time the debtor takes classes with the service which teach money management techniques. Within a specified time the person pays off the debt.
All of this may sound great, but unfortunately, there are no federal regulations governing these services, and only 17 states have passed state regulations. These programs often promise that you can begin anew with a clean slate, but they fail to mention that many creditors are not interested in allowing their customers to go through such a program, and may reject the terms of the repayment plan from the start. The result often is that the person’s credit not only is not improved, but is damaged even further. Moreover, the person may still need to file bankruptcy. Finally, there are many credit counseling services that are actually scams.
For Help with Your Bankruptcy
It is important that you work with a College Station bankruptcy attorney who understands the process thoroughly if you are filing bankruptcy. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.