If your debt is a dark cloud hanging over your life, you’re probably anxiously looking for a way to resolve it. Bankruptcy, while a necessary solution in some situations, is a stressful process that tanks your credit score for a long time. So, how do you avoid it? When you have thousands in unsecured debt and no way of making consistent payments, it might seem like you’re out of options.
Daniel Ciment of Ciment Law Firm, PLLC., is an experienced debt resolution attorney who developed a highly successful debt protection program to help his clients become free from debt. This article discusses debt relief programs and debt protection strategies to help you make an informed decision about your finances.
Texas Debt Protection Program
Bankruptcy isn’t the only option when you can’t afford your credit card payments. Every state, including Texas, has various debt relief programs to help you overcome debt. You can also work with a skilled debt resolution attorney to discover your options for managing, reducing, or canceling your debt.
The debt relief programs can help you pay off or even lower your debt amount, but some will require negotiation and approval from the creditor. Your attorney can work with creditors on your behalf to settle on terms that benefit you and pave the way to debt resolution.
Debt Management Plan
Debt management plans can reduce the interest rate on your credit cards to about 8%, which is much better than the typical 25% to 30% that you would typically pay. When you enroll in the program, credit counselors will use your income and budget to calculate a monthly payment you can handle. You’ll keep making on-time payments until you pay off the debt, but you can quit anytime.
A debt management plan can help you save money and pay off your card faster if you struggle to make monthly payments toward high-interest credit card debt. Creditors prefer to get some money rather than none, so they rarely deny these agreements.
As a part of Ciment Law Firm’s Debt Protection Program, our debt resolution attorney can negotiate with creditors to decide on a payment plan that works for you.
In Texas, there are for-profit and non-profit debt settlement programs. For-profit debt settlement involves making a deal with the creditor that you’ll stop making monthly payments to them directly. Instead, you put money in an escrow account and pay the debt back according to your agreement, which could be half or more of what you owed.
The downsides to for-profit debt settlement are that not making payments means your account accumulates late fees and interest charges, and you have to deal with tax consequences. If you have more than $600 in debt forgiven, the IRS requires you to declare it as income on your tax return.
Non-profit debt settlement agencies also negotiate forgiveness for a portion of your debt, but the terms differ from for-profit debt settlements. If you haven’t made a payment in 180 days, you can accept a 36-month payment plan to resolve your debt with 0% interest. Your payments must be on time, or the program ends.
Fair Debt Collection Practices Act
You might not realize it, but if any creditor violates the Fair Debt Collection Practices Act, you and your Texas debt collection attorney can report them for breaking the law. As a result, you could receive financial compensation for each violation and potentially debt forgiveness. Download our free report, 7 Illegal Debt Collection Practices (And How You Can Fight Back).
According to debt collection laws, creditors cannot:
- Call you at work
- Call you late at night or early in the morning
- Call you instead of your attorney
- Contact anyone else about your debt
- Harass you or your family and friends
- Contact you if you tell them not to in writing
Texas Statute of Limitations
A debt collector has four years to file a lawsuit against you to recover a debt in Texas, and making payments does not reset the timer on the statute of limitations. Creditors might still try to take legal action, but a knowledgeable debt collection lawyer can likely get the court to dismiss their case.
Start on the Path to Solving Your Debt with Ciment Law Firm, PLLC.
You may not have to resort to bankruptcy; there are many options for resolving your debt in Texas. With our proven Debt Protection Program at Ciment Law Firm, PLLC., in Katy, TX, we help Texans break free from the chains of debt.
Daniel Ciment is a debt resolution attorney with extensive experience protecting the rights of consumers when creditors go too far. At Ciment Law Firm, PLLC., we can help you manage your debt and rebuild your credit to regain control of your life.
Call Ciment Law Firm, PLLC., at 281-937-3949 or fill out our online form for a free case evaluation with a debt resolution attorney. We serve clients throughout Texas from our offices in Katy, Dallas, Austin, El Paso, San Antonio, and Houston.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.