With credit card debt averaging a staggering $7,122 per person, it is no wonder that credit counseling agencies have grown in popularity over recent years. Despite their promises of reducing debt and reestablishing financial health, there are many credit counseling agencies that are shady or flat-out bad. When facing unbearable credit card debt, many Americans consider two prominent options:
- Seek help from a credit counseling agency
- Meet with a bankruptcy attorney to discharge outstanding debt
Most people avoid a bankruptcy attorney because of the negative association with bankruptcies, but ineffective credit counseling can create long-term damage. Knowing exactly how credit counseling services work will help you decide which option is best for you.
The biggest secret about these agencies is that they don’t have any more legal authority or power to settle and negotiate your debts than you do. Mostly, these agencies just help you lower interest rates and manage payments to settle your account “for pennies on the dollar.” Though they charge steep fees upfront, the quality of their services don’t necessarily match their rates.
Since credit counseling isn’t always what it appears and can actually add up to higher bills in the long-run, the more appealing option would be to consult a Dallas bankruptcy attorney. Unlike credit counseling agencies, bankruptcy attorneys help guide you through the bankruptcy process to discharge almost all outstanding debts.
The main reason that people avoid consulting a bankruptcy attorney is because of the negative association. However, bankruptcy doesn’t permanently affect credit scores and can be cheaper than dealing with a shady or ineffective credit counseling service. With a bankruptcy attorney, you can explore options such as Chapter 7 or Chapter 13, and have a direct say in how your financial health is handled. Instead of trying to manage or counsel you through anything, a bankruptcy attorney serves as a guide, resource, and advocate for you during the bankruptcy process.