Written by Charleston Bankruptcy Lawyer, Russell A. DeMott
In “Should I Try Credit Counseling? (Part One)” I discussed the fact that credit counseling–and by this I mean a debt repayment plan–is an appropriate solution for some clients in some situations. If a client wants to try a debt repayment plan and has the necessary disposable income, I don’t ever try to dissuade the client from trying it. By “disposable income,” I mean a meaningful amount of income left over after payment of necessary budgetary expenses like housing, transportation, food, clothing, utilities, and so on. If the client has sufficient money available to repay debts, a debt repayment plan may make sense.
How much does the client need to make a debt repayment plan feasible?
It all depends on the facts. How much debt does the client have? How much disposable income can be made available to repay the debts? Will the creditors work with the debtor to reduce or eliminate interest? Can the debt be paid off in a reasonable amount of time? Is the client’s income steady and predicable or subject to significant fluctuation? Each case is unique. If the debts can be packaged into a payment plan without the need for bankruptcy, this option may make sense. Just remember, creditors are not obligated to accept your proposed terms.
What agency should you use to explore this option?
First, let me admit my bias. I don’t like dealing with unknown companies over the Internet. I would not send them my money, and I don’t think you should, either. I recommend that you sit down with someone you can trust face to face. In the Charleston area, I recommend Family Services. Note that on the Family Services website Charleston Mayor Joe Riley is featured in a video clip recommending Family Services for foreclosure assistance. I think that speaks volumes of the reputation Family Services has here in Charleston.
If you live outside of Charleston, I have the same advice: go local. Use someone you can talk to face to face and who has a solid reputation in your area. Be extremely careful about sending your hard-earned money to someone you found on the Internet five states away. I’m not saying national agencies aren’t legitimate, I’m just saying they would not be my first choice for help negotiating a debt repayment plan.
As I also noted in Should I Try Credit Counseling? (Part One), consult with an attorney first. Only an attorney can give you legal advice and all your options. A good bankruptcy attorney doesn’t “sell” bankruptcy. Instead his goal is to find the right solution to your financial problem. Sometimes that’s a debt repayment plan with a reputable agency like Family Services, and sometimes it’s not. Know your rights and be careful about where you send your money.