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Alternatives to Bankruptcy in Texas

alternatives to bankruptcy in Texas

Keeping up with personal finances is more challenging than ever. Many individuals are suffering from economic losses associated with the ongoing pandemic. Because of financial struggles, many Texans are considering bankruptcy. But increasingly, consumers are asking if there are alternatives to bankruptcy in Texas.

Many families and small businesses continue to struggle, while banks begin to file lawsuits against consumers. But is bankruptcy the only option for debt relief? At Daic Law, we help consumers struggling financially find debt relief and debt defense options that work for their individual situations.

Understanding Debt and Bankruptcy

If you are struggling under the pressure of debt, you may feel like bankruptcy is the best option to find relief. That is not always the case, however. Before you file for bankruptcy, you should consider some important factors related to your situation, such as:

  • Are your debts secured (mortgage, auto loan, loans to purchase property, etc.)?
  • Are your debts unsecured (student loans, credit card debt, medical bills, etc.)?
  • What is your current income?
  • Are you behind on payments?
  • Are you being sued by a creditor?

All of these considerations can help determine if you qualify for bankruptcy, and if so, what the possible outcomes are.

Alternatives to Bankruptcy in Texas

If you are in need of debt relief and don’t qualify for bankruptcy, or don’t want to file bankruptcy, there may be other options for debt relief. At Daic Law, we often help clients explore debt relief options including:

Debt Negotiation

Debt negotiation is one of the more common alternatives to bankruptcy in Texas. With debt negotiation, we help you negotiate with the creditor to establish an affordable payment plan, to accept a settlement offer, or to eliminate certain debt or fees. It is important for consumers to understand exactly what their responsibilities are after negotiating a debt.

Debt Consolidation

Another alternative to bankruptcy is debt consolidation. Debt consolidation is used for unsecured debts. Successful debt consolidation can have the following benefits:

  • Combining unsecured debts into one monthly payment
  • Lowering monthly cash outflow
  • Reducing interest rate amounts
  • Reducing or removing penalties or finance charges
  • Extending the deadline to pay in full

Debt consolidation is not for everyone, however, and does have some potential drawbacks. Namely, you may end up with higher interest rate, and may have to use your home or property as collateral.

Debt Reorganization

Debt reorganization is similar to Chapter 13 bankruptcy, which also reorganizes debt. However, you can reorganize debt without filing for bankruptcy. To do this, you will negotiate with creditors to reduce monthly payments or defer payments. With debt reorganization, you may be able to reach a settlement amount and have any remaining balance discharged by the creditor after paying.

Credit Counseling

Credit counseling is an alternative to bankruptcy in Texas that many people try. With credit counseling, you work with a consumer credit counseling agent to create a plan to pay off your debt. Each month, you deposit an agreed upon amount into a designated account and the counselor uses that money to pay your debts. This process can take from three to five years to complete. Once the terms of the plan are met, your debts will be paid in full or remaining balances discharged.

We must give a word of caution about credit counseling companies. In recent years, there have been a number of scams that have caused consumers to lose a lot of money. Disreputable or scammer companies may attempt to take money from you without holding up their end of the agreement. Watch out for red flags including:

  • Credit counselor doesn’t pay creditors
  • Credit counselor makes promises they don’t keep
  • Hidden charges are added to your agreement
  • Credit counselor withdraws money designated for creditors
  • There are unreasonably high fees for the service
  • The credit counseling company misrepresents themselves as a nonprofit organization

If any of these happen to you, it is important to contact an attorney and explore your options for filing charges against the company.

Finding the Best Options for Debt Relief

If you are overwhelmed with debt or subject to a debt collection lawsuit, it is only natural and reasonable that you are exploring your options. While bankruptcy can be a good option for some people, it isn’t right for everyone.

At Daic Law, we help consumers throughout Texas explore all possible options for debt relief. Our goal is to create a debt relief plan that works for the client and their goals. Let us help you find the best option for debt relief. Call us at 877-893-6040, email us at, or schedule a free consultation here.