Is “credit counseling” a good alternative to filing for bankruptcy?
August 1, 2010 By Greater Boston Law For most people, no. Credit counseling companies advertise heavily, charge a big “up-front” fee that can exceed the cost of a bankruptcy filing, and most often, accomplish little. They calculate a monthly payment to be divided among your creditors based on your ability to pay. In the meantime, interest is still running on the credit cards per the contract, but the agency still gets their percentage of the monthly payment. The agency has NO POWER TO ALTER THE DEAL with the creditor. They can keep them at bay temporarily, but you end up paying the piper in one way or another. Only a bankruptcy court has the power to DISCHARGE debt.
