Financial woes are inevitable for most people at some point. Instability in the economy, a changing business climate, and medical emergencies. In these situations, you may be overwhelmed with debt collector efforts, financial strain, and worries about the future. In these cases, you need the help of a debt defense lawyer in Texas.
There are many reasons why you may be struggling and be considering bankruptcy. Before you file, however, you should consider – what are your alternatives to bankruptcy in Texas?
Alternatives to Bankruptcy in Texas
Sometimes the simplest alternative to bankruptcy is working with a creditor to initiate a payment plan to help resolve your debt. Unfortunately, creditors aren’t always willing to work with clients to find a suitable and mutually-feasible resolution. For these clients, there are two primary alternatives to bankruptcy that may help – debt consolidation and credit counseling. Let’s look at each of these options.
Debt consolidation is often confused with bankruptcy, but there are ways of consolidating debt outside of bankruptcy court. A consolidation loan is the most common form of debt consolidation. With debt consolidation, you will work with a lender or debt consolidation company, who will grant you a loan to pay off your debt. With this plan, all your debt will be consolidated and you will only have one monthly payment, and often, lower interest.
Depending on your financial situation, debt consolidation may require you to use your home as collateral, or you may be able to consolidate debt through a second mortgage. If you are not a homeowner, you may have a higher interest rate or more demanding payments.
Another alternative to bankruptcy is credit counseling. A credit counseling plan is a plan that helps creditors work with you to lower interest rates and make payments affordable to your budget. Most credit counseling plans require you to make a single payment to your credit counseling company, who then distributes payments to your creditors accordingly.
Most credit counseling plans take around two to three years to complete. During this time, you may be unable to apply for additional credit. During this time you will also likely pay nominal fees to the credit counseling company, depending on the service you choose.
Protect Your Legal Rights
Debt consolidation and credit counseling are two popular alternatives to bankruptcy. Managed properly, these options can save you valuable time and money, and can relieve financial stress.
One important consideration when exploring alternatives to bankruptcy is protection of your legal rights. Not all credit counseling or consolidation companies are legitimate. Some may take advantage of you and make false promises. Before entering any sort of financial agreement with a credit counselor or debt consolidation company, contact an attorney to ensure your legal rights are upheld throughout the process.
Contact a Bankruptcy Attorney
At Daic Law, we work with clients all across Texas, helping them explore their legal rights and options. We know that financial hardship is difficult and emotional, and we want to ensure that you find the best solution possible. Find out how we can help you with bankruptcy, debt defense, or debt collection lawsuits. Contact Daic Law today to learn more by calling us at (713) 808-5246, or by emailing us at firstname.lastname@example.org. Learn more about our services for clients in Houston, Austin, Dallas, San Antonio, and surrounding areas.
Frequently Asked Questions about Bankruptcy in Texas