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!

The problem with that was, that unless the Debtor requested a reinvestigation, when they applied for credit years later, it still looked like they owed money to all these places. In fact, it looked like they had incurred new debt after the bankruptcy, and then not paid it, which I understand is even worse on your credit.

My firm has been doing a complimentary “credit clean-up” for clients for several years now, and it has worked rather well. We help our clients order a reinvestigation of credit from all the major credit bureaus, when each client receives a bankruptcy discharge. It requests that all the discharged debts show as a zero balance and that they were discharged in bankruptcy. I’m told it increases clients’ credit scores by anywhere from 25-150 points.

Anyway, for most people that go through bankruptcy, whose lawyer does not do a “credit clean-up” for them, having the old trade-lines still show up can be a major problem. It can keep them from getting credit, car loans, mortgages, all kinds of things.

Finally, someone brought a class action, and Terri White is one of the named plaintiffs.  The credit bureaus have agreed to fix your credit after bankruptcy now, apparently without being asked, and pay some money damages to certain consumers.

Who is covered? If you received a Chapter 7 discharge and your credit report was issued by one of the Defendants between March 15, 2002 and May 11, 2009 (or, for California residents in the case of TransUnion, between May 12, 2001 and May 11, 2009), and the credit report reported debts that were due and owing which were discharged in the bankruptcy.

If this is you, you may be due certain payments, from $20 to $750, depending upon if you can prove that you were denied a job, a mortgage, or other credit by reason of the erroneous credit report(s).

Should you take it? It’s a decision for you and your lawyer, if you have one. Of the $45 Million settlement, the lawyers for the class get $10 Million. Consumers split the remaining $35 Million.

For the official website that describes the settlement in detail, and provides a claim form, go to http://www.bankruptcydischargesettlement.com/.

For a web site that argues against the settlement, and suggests that you may want to object to it, go to http://stopthebankruptcydischargesettlement.com/.

Good luck!

Flowers at Moody Gardens, Galveston Texas

If your credit card debts are delinquent, backed up or behind, or about to get that way, and you think you may be able to pull things out WITHOUT filing bankruptcy, some of the major credit card banks just set up a website that may help you.

The new website is http://www.helpwithmycredit.org/index.php, and it appears to be a useful start at helping people who have credit card trouble. Of course in my opinion, the banks should have done this a long time ago, before the credit card delinquency rate was 10% like it is now, but I applaud them for doing it, anyway.

If you would, check it out and post a comment to tell me what you think of it, and whether it helped you or not.