 With the struggling economy, many people are finding themselves deep in credit card debt. Therefore, consumers are forced to turn to debt consolidation in order to get control of their finances. However, before a person decides to consolidate their credit card debt, they need to be aware of the credit... |
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Living with debt is by no means easy. There’s the constant concern of living paycheck to paycheck and the never ending issue of covering monthly bills and living expenses. While most of us pride ourselves on being self-sufficient, it’s hard to ignore that we all sometimes live well beyond our means.... |
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| Texas |
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Many residents of Texas have fallen on hard times in recent years, which is evident in many consumer indexes and credit card debt statistics. Due to this fact, there are more and more debt consolidation services and consumer credit counseling agencies popping up throughout the state. Not only are consumers not completely informed about debt management programs, but they are also not educated about what to look for from a debt relief provider or the laws that protect them from frauds. To make an educated choice, one must understand what solutions are currently being offered. The two most popular are credit counseling and debt settlement, also known as debt negotiation. Although both options aim to help reduce your debt, their approaches are very different. The pros and cons of credit counseling are much different. Credit counseling aims to negotiate your credit card interest, so the savings are usually not as substantial and the monthly payment can be higher than a settlement plan. That being said, your credit report after credit counseling will show your debts were paid in full. The organizations who offer these programs are usually non profit, although they do charge fees and this does not ensure that their services are legitimate. Do you want to speak with a debt specialist? Submit a form and PayingPaul.Com will match you with one now! Texas Debt Management Laws Texas has instituted regulations and requirements for debt management companies to operate in compliance in the state. Ultimately, the laws are in place to ensure that Texas residents receive affordable and quality debt consolidation services. Definition Under the law, a “debt management service” is defined as:” (A) the receiving of money from a consumer for the purpose of distributing that money to or among one or more of the creditors of the consumer in full or partial payment of the consumer's obligations; (B) arranging or assisting a consumer to arrange for the distribution of one or more payments to or among one or more creditors of the consumer in full or partial payment of the consumer's obligations; or (C) exercising control, directly or indirectly, or arranging for the exercise of control over funds of a consumer for the purpose of distributing payments to or among one or more creditors of the consumer in full or partial payment of the consumer's obligations. Exemptions It should be noted that the law makes a point to exempt the following parties, among others, from regulation under the act: -attorneys licensed to practice law in Texas -bill payer services (or anything else that distributes payments on behalf of person without attempting to alter the terms of the loan) Contract Requirements The law requires that a written contract be made between the business and the debtor and that the contract include the following statements: “ (A) that debt management services are not suitable for all consumers and that consumers may request information about other ways, including bankruptcy, to deal with indebtedness; (B) that if the provider is a nonprofit or tax-exempt organization the provider cannot require donations or contributions; and (C) if applicable, that some of the provider's funding comes from contributions from creditors who participate in debt management plans, except that a provider may substitute for "some" the actual percentage of creditor contributions it received during the most recent reporting period. Fees Must be fair and reasonable For more information about consumer credit counseling and debt consolidation, feel free to visit this link: Warning PDF http://tlo2.tlc.state.tx.us/statutes/docs/FI/content/pdf/fi.005.00.00039 4.00.pdf Other Resources Filing Bankruptcy in Texas Bankruptcy Laws in Texas Debt Collection in Texas |
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