Statistics typically tell the real story. Approximately half (50%) of consumers who participate in credit counseling programs, or long-term debt repayment plans, finish successfully, according to creditcards.com. But, that also means that 50% fail. 

Debt settlement programs offer even bleaker outcomes. There are mixed statistics on debt settlement programs, and many end up being fraudulent or deceptive. According to the United States Government Accountability Office, state investigations and the FTC have determined that less than ten percent of participants successfully completed debt settlement programs (page 2, paragraph 1). Others have reported much lower success rates, in the lower single digits. 

From the outside, debt settlement and credit counseling programs seem similar to people who do not completely understand the differences. Commonly, though, the majority of consumers that enter into one program or the other usually do not have the disposable income that is necessary to repay their debts. With this said, most people truly need complete debt forgiveness, which is what Chapter 13 and Chapter 7 bankruptcy provides. 

Promoting Bankruptcy

A lot of you are probably reading this and thinking, “Yeah, I see what you are doing.” At this point, it probably seems like we are trashing the credit counseling industry because we make money helping people file bankruptcy. Before deciding to file bankruptcy, we highly recommend that potential clients look at all of their options, including credit counseling. Additionally, filing bankruptcy requires the completion of a credit counseling course. 

However, most people who reach out for financial help have waited until they have exhausted all of their options and are at their wit’s end. Typically, they have pushed their financial situation beyond restoration. 

Underestimating Monthly Expenses

We have noticed that the majority of people experiencing financial problems and seeking credit counseling services do not estimate their monthly expenses accurately. When chatting with a credit counselor, it is crucial for monthly expenses to be outlined nearly perfectly. Otherwise, a monthly budget and repayment plan might look excellent on paper, but when any unexpected expenses happen, it throws the budget completely off track. Some of those unexpected expenses include vehicle repairs, furnace repairs, roof repair or replacement, medical bills, veterinarian bills, and even the heating bills in winter. 

Unexpected expenses come at times when you least expect them, but they still have to be accounted for in a budget. These are crucial aspects of a budget that a lawyer will consider when building a budget for your bankruptcy repayment plan. If credit counseling works for you, that is wonderful, but it might be that you are at the point that you need to file bankruptcy. You might need help structuring a budget that will keep your finances on track so you can obtain the debt relief that you are seeking, and we can do all of that for you. 

Are You Considering Filing For Bankruptcy?

If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.

James Roswold
Connect with me
James Roswold is a Kansas & Missouri personal injury, workers comp, and medical malpractice attorney.