Dallas currently has some of the highest rent increases across the country, and inflation is really hurting many consumers across Texas, leading many to consider emergency debt relief.
Next, you may come across an ad promising emergency debt relief in Texas. You may have also seen an ad (like this one below) on Instagram, Facebook, TikTok or another social media platform that promises Emergency Debt Relief in Texas.
You may go to a website that promises “Emergency” debt relief for US residents or Texas residents that helps you fundamentally reduce what you own on your unsecured. One company, TurboDebt, has an ad that says you aren’t going to have to pay the money back and that it won’t take a huge hit on your credit.
That sounds promising, but is it legitimate?
The purpose of this article is to explore the legitimacy of emergency debt relief in Texas, explain how debt relief works, the cost, and the alternatives to help you make the most informed decision. Also, just for reference, companies pitching emergency debt relief are generally different than Texas Debt Relief org.
Is Emergency Debt Relief in Texas legitimate?
Unfortunately, while the marketing may be effective, many of these companies are marketing firms that are pointing you to a debt relief company.
These firms also seem to be playing off the actual government emergency relief provided by the government from the COVID-19 pandemic. What’s important to note is that it’s not “debt” relief, but just emergency relief.
Thankfully, the first option of your search may lead you to Texas’s article covering debt relief scams. Now, what’s important is that it’s referring to scams that reach out to you and also charge fees upfront, but it does mention that credit counseling, debt consolidation and debt settlement are valid options.
As we know these companies are pitching a debt relief company, what is it and how does it work?
What Is Debt Relief?
Debt relief is also known as debt settlement and debt consolidation programs. It is where a company will negotiate and settle your debts on your behalf and charge a fee for it’s services.
Why would creditors settle your debt? Your debt often has to be behind and past due for the creditors to settle the debt, so you would often stop paying your creditors, add funds each month (known as a monthly draft) to an escrow bank account. Once you have enough funds, the company would settle each account one by one.
There are many companies that provide this service, but you may want to be aware of the fees that the company charges. We are very selective of who we work with as some companies charge exorbitant fees and have bad customer reviews.
Debt relief can save you money and can get you on a payment plan. It can also help you get out of debt much faster than paying minimums on credit cards.
That said, here’s a couple of things to be aware of:
- Debt relief will impact your credit score.
- Debt relief is often less expensive than debt management
- You could be sued although that’s often based on the creditor. You can use our Texas Creditor Lawsuit Likelihood Calculator to estimate whether you could be sued in a debt collection lawsuit.
- Consider these other pros and cons.
How Much Does Debt Relief Options Cost in Texas?
If you are struggling with debt, one of the most important things to understand is how much each debt relief option would cost. For example, will a debt relief program cost less than what your current monthly obligations cost?
As such, we built the below Texas debt relief options and cost calculator. It’s a free resource, and no email address is required as we want you to be as informed as possible.
Here’s an example of the results for someone in Texas who was considering different debt relief options. Please note that the Chapter 7 qualification is based on the bankruptcy means test in Texas.
Alternatives to Emergency Debt Relief in Texas
Let’s say that you do not want to pursue emergency debt relief in Texas. What are your other non-debt relief options?
Debt Payoff Planning
You can get yourself out of debt without resorting to the other two mentioned options, or bankruptcy. But this method is only feasible if you are not far behind and you can afford to make some minimum payments on your debts. There are three vital steps that you can follow:
Find Out How Much Debt You Have
This is the initial step to getting out of debt. This can be for any Texan, and you can get a free government issued copy of your credit report.
By ignoring your debts, they won’t just disappear, so you have to tally up your entire debts. After this, you calculate your debt-to-income ratio.
The debt-to-income ratio can be termed as the total debts-minus mortgages-as a percentage of your gross annual earnings. This will tell you how much in debt you are, and what it is going to take to get you out.
Find Side Hustles to Increase Your Income
If you have a side hustle, you can increase income to pay off the debt faster. This means that you may not have to pursue emergency debt relief. You just need to move from a situation where you are spending more money than you make, into one where you earn more than what you spend. This means that the quicker you want to get away from debt, the more you have to make lots of money above your spending. Remember, you have to earn enough to live on and pay off your debts, so it can be a tall order, but with the right mindset, it is possible. Here are a few tricks of making extra money that can get you out of debt faster:
- You can sell stuff that you don’t need. From Craigslist to eBay, to a simple yard sale, this can give you easy and fast cash. The downside to this is that sooner than later; you will run out of stuff to sell.
- The other option is to find another higher-paying job. This involves getting that promotion at work or even finding a better-paying job
- You can get an extra job or even decide to work longer hours. There are lots of jobs out there that you can add to your schedule, including babysitting, driving for Uber or Lyft, waiting tables, and freelance writing.
Legal Aid in Texas
For those in extreme need of some financial assistance, you can also look into Texas legal aid options to avoid emergency debt relief altogether. You can Google options, but here are some options:
Tracking Income and Decrease Spending
One way to avoid emergency debt relief in Texas may be figuring out a better way to track income and decrease spending.
If you want to win the debt battle, you have to keep track of your money. By crafting a budget and sticking to it, you ensure that you can track where each dollar is going.
Some use good old fashioned paper and pen, but you can also use a spending tracker app. We built a tracking and debt payoff planner with the goal of saving $2000 for users in interest payments.
When you are not tracking your money, you will always be wondering where it went, But with a great spending app at your disposal, you may start having financial wins.. After all, has been said and done, it will be up to you to choose the most suitable method of getting out of debt. Keep in mind that your choice should be determined by several factors, including how far behind you are in your payments plus a host of other consideration.
Should You Pursue Emergency Debt Relief in Texas?
Whether you live in Houston or San Antonio, many Texans are needing some sort of emergency debt relief to help them deal with increasing expenses.
While you may not look for an “emergency debt relief” company that promises the world, you can still find other options and compare those options to make the most informed decision for your debt relief situation.
Use the calculator below to help you estimate your options and costs or give us a call/text at 833-272-3631.