For-Profit Debt Counseling and Bankruptcy

It is rarely a good idea to seek the services of for-profit debt counseling. People who are in dire financial situations are easy prey for those that offer credit repair or debt counseling. It is common practice in some debt counseling services to scam the customer or offer high-interest rate consolidation loans as a way out of debt. Just like other instances, if it seems to good to be true, it is probably a scam. 

Contacting You

Sometimes these unscrupulous people will contact you after reading about your foreclosure notice or legal action against you, announcements. They are counting on you to be looking for assistance, and they will say the right things at the right time to get you to pay them money that may never reach your creditors. 

In the bankruptcy process, you must attend credit counseling before your case can be discharged. There is a list of court-approved counselors on the U.S. Justice Department.

Non-profit Credit Counseling

Non-profit credit counselors may offer you a payment plan to satisfy your creditors. The problem with these is these counselors often are paid by the credit card industry, or they receive a bonus on every payment plan they set up. If you get behind on your payments, you may be in a worse position than you started. Filing bankruptcy eliminates your unsecured debt, and you will no longer be legally obligated to pay them. 

If you are looking for help in understanding how to get a fresh financial start, contact a Houston bankruptcy attorney to discuss what options you may have.