MMI provides financial guidance and counseling, and if you qualify can put you on a debt management plan (DMP) to repay your debts over time. DMP’s don’t generally reduce your debt; they are “consolidation” plans, where you make one payment a month to MMI, and MMI pays your creditors for you.

For the people that can afford these DMP plans, they are fine. It can help you avoid bankruptcy. Many of my clients have consulted with credit counselors before they come see me, and legitimate ones like MMI will just tell them whether or not they can help them, or if they should consult an attorney about their debt problems, and possibly consider filing bankruptcy.

Most if not all of the “shady” debt settlement companies, are not even legally operating in Texas. To operate legally, they have to be registered with the Texas Consumer Credit Commissioner, and comply with the Texas Debtor Assistance Law, which almost none of them do.

To see if your debt settlement company complies, go to http://www.occc.state.tx.us/pages/searches.htm and click on “List of Debt Management Service Providers. If your company is not on that list, they are not operating legally in the State of Texas.

I just had a couple come in to the office this morning, that had paid a debt settlement company $9000 in fees, and the company had only settled one debt for them. Then they were sued for $19,000 by a creditor, and the debt settlement company told them they needed to file bankruptcy.

So the debt settlement company basically did them no good at all. We will likely put them into a Chapter 13 bankruptcy, paying $450 per month for 5 years. That will repay 30% of their $75,000 in unsecured debt, with the rest being discharged or cancelled. And no one can sue them or call them at work trying to collect, once they file Chapter 13.

If you are interested in consulting with me about your options, including filing a bankruptcy case, and you live in the Houston Texas area or surrounding counties, give my office a call at 713-772-8037 and make an appointment to meet with me. Or you can make an appointment on my website at http://www.jthomasblack.com. There is no charge for your first visit.

Anyway, welcome to Sugar Land, MMI. I’m sure you will be a good neighbor!

In my experience, that is not real common here in Texas, but it wouldn’t surprise me if it begins to increase. Particularly where there are second mortgages, or so-called “80-20″ financing.

Like you don’t have enough to worry about, if you are losing your house, to have the lender or a collection agency coming after you trying to collect. They could file a lawsuit against you for the rest of the money, the money that they did not recover from the foreclosure process. If they got a judgment, they could seize your non-exempt assets such as bank accounts, investments or possibly other property.

But one cause of the lenders beginning to pursue people, is the “strategic” foreclosures, where people are letting their houses go back, even though they could afford them if they want to do so.

Not so much here in Houston, but in other areas of the country, home prices have fallen precipitously in the past few years. And if you owe $50,000 or $100,000 more on your house than it is worth, it is understandable that some people would choose to just “walk away” from the house, rather than struggle to continue to pay it.

Particularly so if they have an adjustable rate mortgage or ARM, and their payments are high. That would be another reason for some people to just give up and walk away.

If you are considering walking away from your home, and letting the bank or mortgage company have it, you should consult with an attorney experienced in these matter such as myself. It could be that your lender will try to pursue you for the debt.

If so, filing bankruptcy is one option to eliminate any chance that they can collect a foreclosure deficiency from you. There may be other options in your situation. To call my office for an appointment, call 713-772-8037. Free first visits are available for residents of the Houston Texas metropolitan area and surrounding counties.

The Sandia Mountains, Albuquerque, New Mexico

There is a class action lawsuit pending in the U.S. District Court for the Western District of San Antonio against Debt Relief Group, LLC, and some alleged associates or associated entities including The Palmer Firm, PC, The Seideman Law Firm, PC, Epic Financial Management, Robert Ancel Palmer, III, Scott R. Seideman, Gregory M. Fitzgerald and Keith J. Waring (CIVIL ACTION SA09CA0637).

The gist of the allegations is that the Defendants operate a “debt settlement company” in violation of the Texas Finance Code, Chapter 394, Consumer Debt Management Services.

The suit says: the Defendants operate an elaborate nationwide scheme promoted by television and internet advertising to defraud debtors that are drowning in credit card and unsecured debt. By masquerading as attorney referral services, unregulated debt negotiators and exempt attorneys, the Defendants collaborate to evade strict state consumer protection regulations enacted to protect unknowing debtors.”

Folks, like I tell the prospective clients that come and consult with me, most if not all of these debt settlement companies are operating illegally in the State of Texas. And if they are operating illegally FROM THE GET GO, it’s not going to be a stretch for them to take your money and leave town, or file bankruptcy, both of which have happened.

In either event, you are likely out of luck. The law regulating these companies has strict requirements, including putting up a bond, being a non-profit organization, making detailed disclosures to consumers, and many others, which the shady ones are not going to comply with. The Texas law that regulates debt settlement companies is at: http://tlo2.tlc.state.tx.us/statutes/fi.toc.htm (see Chapter 394).

The law also requires that these companies register with the Texas Consumer Credit Commissioner, and the list of the few that are approved is at: http://www.occc.state.tx.us/pages/searches.html (see “List of Debt Management Service Providers). If you live in Texas, all of the others that you see advertising to you on TV and so forth are operating outside the law, if they are not on this list.

If you are in serious credit card debt, or other types of debt, come see an expert bankruptcy attorney such as myself. I discuss bankruptcy but I also discuss all of your options with you, as they relate to your particular circumstances.

One option that I talk to all my clients about is settling with your creditors, but it is only one option out of five options, and frankly, it has some bad points to it, which I will discuss with you if you come in to see me.

I offer a free consultation to consumers with debt problems that live in the Houston, Texas area or surrounding counties. To make an appointment, please call my office during working hours at 713-772-8037. Or you can make an appointment 24 hours a day at my main web site, http://www.jthomasblack.com. Just click on the red button on the upper right-hand side of any page.

Dawn over the Atlantic from Hilton Head Island

I had a couple come in a couple of months ago. They had a small business, and had not been able to pay a vendor, i.e. someone that sold them supplies for their business. The vendor had filed a lawsuit and the couple had not shown up in court to oppose it.

Well, long story short, the court had issued a judgment. Only now, it included attorney fees and court costs, increasing the amount owed by about one-third. And that’s not the worst of it- the vendor’s attorney had garnished the couple’s bank account, and seized $8,000! All the money that they had in the world.

Don’t let this happen to you. By luck, in the limited circumstances of this couple’s case, we were able to file a Chapter 13 bankruptcy and get the funds released. But that may not happen in your case; count on it NOT happening. If you have a judgment against you, just get your money out of the bank. And go see a professional in this area (such as myself) that can give you advice about what to do next.

Oh, and by the way, if you owe money to the bank where your checking or savings accounts are, the SAME THING APPLIES! Get your money out of those banks, if you are in default with them, or in danger of being in default. They can “freeze” or put an administrative hold on the funds, even in bankruptcy. Outside of bankruptcy, they can offset the funds, just take them, anytime you are in default with them, or anytime they “deem themselves insecure,” depending upon the terms of your agreement with them.

Don’t let your cash money be seized by a creditor, or by your bank, if you are having money troubles.