Thomas F. Miles, Attorney and Counselor at Law
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Is credit counseling a solid debt reorganization option?

Faced with serious debt issues, many in California will consider their options in finding debt relief. For some, credit counseling seems like an attractive possibility. While this approach can help some people achieve debt reorganization, it is not a good fit for every set of needs.

Credit counseling begins by finding a company or organization with a solid reputation and good reviews by past clients. That can be a challenge, as the debt relief industry is rife with scams. Once a credit counseling source has been selected, the client will go in to sit down and discuss the full range of his or her debt. This includes providing documentation for all income, assets and debts.

Next, the credit counselor can try to contact creditors and negotiate a payment solution on the debtor's behalf. In some cases, it is possible to negotiate reduced fees and manageable payment terms. Other times, creditors refuse to work with the credit counselor on the account, and the debt remains as it was at the beginning of the process. Then, the credit counselor will create a repayment plan that will slowly make good on all of the client's obligations, and the client will begin making monthly payments which will be processed by the counseling company, for a fee, of course.

Some in California are able to achieve debt relief through this type of credit counseling. Others, however, emerge from the process in even worse financial shape than when they began. For many, true debt reorganization is better achieved through the process of Chapter 13 bankruptcy, where the court and a skilled legal team can structure a plan for eliminating debt.  

Source:, "How to get out of debt", Elizabeth O'Brien, July 23, 2016

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Thomas F. Miles, Attorney and Counselor at Law
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