Credit counselor vs bankruptcy

[sdavid645]

I was told that filing for Bankruptcy chapter 7 would be a faster way to rebuilding credit.

[buffetbuster]

With a CH7, you get to start over fresh. All of your debt, excluding Student Loans and anything you are reaffirming with get discharged in the BK. Now, the CH7 will stay on your credit report for 10 years...but, you can start rebuilding credit as soon as you are discharged. I'm not 100% sure how credit counseling works, never looked into it.

[tobee43]

i personally don't know anyone that went successfully through credit counseling (not to say there hasn't been). however, i have found out, after our own knowing a few that did it, it was even worse than filing for bk. as these companies make you think that worked out deals with the creditors and all the time they keep reporting late payments and write offs on to the reporting credit agencies.

those that i knew wished they never wasted their time and money on them. had they just filed first, the year or two they spent with these people would not have been "credit" rebuilding wasted time.

and just to leave an "open" door here, maybe these places have gotten better since then, and hopefully someone will chime in with a different go good experience?

[lillymarlene]

July 2010, I went to see a credit counselor. This actually turned out to be a positive experience. The person I met with kindly pointed out that I was just too "far gone" that, I would be better off to declare bankruptcy. This was my wake up call, that finally pushed me into action. I filed chapter 13, three months later.

[BROKEDED]

You haven't really provided us with much to go on as far as your debt situation. Not everyone qualifies for bankruptcy whereas those that do may qualify for Chapter 7 and others may only have Chapter 13 available to them. I would never consider bankruptcy as a means to rebuild credit. That's kind of an after the fact issue. Bankruptcy is used to provide relief from crushing debt that can not be reasonably repayed or restructured to satisfy creditors.

That said, I think credit counseling is a great tool for someone who simply needs help organizing their debt, and creating a budget to systematically pay it off. But, businesses that claim to help you erase or drastically cut your debt for a fee generally have very poor track records.