Debt Relief Options- Credit Counseling vs. Chapter 13 Bankruptcy

There are many consumers in need of debt settlement or debt relief options. Those who look into debt settlement might also find various advantages to credit counseling or Chapter 13 bankruptcy. While the two are very similar, they have different consequences, processes, and even different end results in many cases. The general idea is to pay debts back with the help of a third party, and some companies will tell you that the negative impact that credit counseling has on your credit is just as bad to potential lenders as bankruptcy.

Credit counseling and Chapter 13 have much more in common than that, though. Here are some more ways that the two are alike:

-The focus is on creating a budget and learning how to spend more responsibly
-Both programs require consumers to pay one bill to a third party, who then makes the payments to the creditors on behalf of the consumer
-Each program has a time frame of 3+ years, and often last up to 5 or more
-Getting removed from the program is as simple as missing just one payment during the repayment plan period
-Both Chapter 13 and credit counseling charge fees. These fees vary when it comes to credit counseling depending on where you live and what you owe. In Chapter 13, the fees include filing fees, lawyer fees, and other court related fees.