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Credit Counseling Programs FAQ's
Will a credit counseling program save my credit score?
Credit counseling and debt management programs look similar to a Chapter 13 bankruptcy on your credit report. Once major difference, is that with a Chapter 13 bankruptcy, you are protected under the federal government. Many people have benefited from credit counseling programs but the completion rate is extremely low. Here is an article you can read with more information, click here.
Is it better to go through a credit counseling program instead of a bankruptcy?
You are in a better position if you file for a chapter 13 bankruptcy. Chapter 13 bankruptcy and credit counseling programs work the same way. You set up a payment plan with your creditors. The difference is, once you file chapter 13 you are protected under the federal law. With credit counseling programs, they may not be able to make arrangements with all of your creditors, and in the end you will still have to pay the accounts they can't make arrangements with.
How do credit counseling programs work?
You will sign up with a credit counseling program and they will make payment arrangements with your creditors. However, some programs charge fees for this. If the company does not have relationships with some of your creditors they may not be able to set up an agreement. The credit counseling programs are on the side of the creditors...not the debtor. An attorney is on the side of the debtor and has your best interests at heart. |
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