Credit Counseling vs. Bankruptcy

Bankruptcy is often a dreaded word in finance that most people would likely prefer to avoid. There is a common perception that filing for bankruptcy is a last resort and an embarrassing admission of defeat. However, what many people don’t know is that bankruptcy can be an ideal option for some debtors and sometimes even a preferable option over other possible solutions.

About Credit Counseling

If you are struggling with a large amount of debt, you are likely reviewing all of the possible solutions that are available to help you regain control of your finances. You may even be trying to avoid bankruptcy at all costs. One solution that is available to you is credit counseling. A credit counselor can help you establish a debt management plan to begin to pay back your debts. Sometimes such counseling also involves debt negotiation, in which your counselor may negotiate with creditors to reduce the total amount of debt that you owe.

Downsides to Credit Counseling

While credit counseling sounds like an ideal solution, it does have its downsides. This type of debt relief is typically a long process that takes many months or even years to resolve. Bankruptcy, on the other hand, is typically filed and completed within 3 to 5 months. Because credit counseling is a longer process, it is often much more expensive than filing for bankruptcy as well. Many credit counseling businesses have also been exposed for fraudulent practices, so it is important to be extremely cautious if you are considering credit counseling.

If you are struggling with your finances but are unsure how to resolve your debt, consider talking with a bankruptcy attorney today. A bankruptcy attorney can discuss multiple debt relief options with you, including different types of bankruptcy, debt negotiation, and counseling. He or she will help you review your finances to help decide which form of debt relief is the best for your individual situation.

Contact Us

To learn more about the many debt relief options available to you and how you can work towards a more secure financial future, please contact the experienced New Orleans bankruptcy attorneys of Kervin & Young, LLC today at 504-599-5906.