Are credit counseling or debt-management companies better than filing for Bankruptcy?
A. While credit counseling is now required for all cases prior to filing bankruptcy, research needs to be done regarding which debt-management and credit counseling services you use. Some debt-management and banking companies will highly recommend credit counseling as an alternative to bankruptcy. However, in our many years of experience, our Second Start bankruptcy attorneys have seen a number of consumers drop out of credit counseling after only a few months of debt-management, only to later file bankruptcy In cases where financial burdens are limited to negotiating monthly payments for unsecured debts (such as credit cards or medical debts), consumers may benefit from the assistance that debt-management companies offer. Every company’s fees vary, but the common rate for credit counseling is around $50. Most consumers choose to contact the creditor and negotiate directly. It is always important to remember that a debt-management company may not always know which option is best for yo